Dollar General reported lower same-store sales for the quarter and year but higher net sales and a more positive outlook for 2022.
With an "okay" year behind it, Dollar General is looking ahead to a more positive 2022, at least during the latter half.
In its latest financial report, the discount chain declared that same-store sales were down 1.4% for the fourth quarter and 2.8% for the fiscal year ending Jan. 28 but struck a positive note in the prediction of a 2.5% same-store sales lift for 2022.
While same-store sales were down, net sales rose 2.8% during the fourth quarter to reach $8.7 billion and 1.4% for the year to top $34.2 billion, likely buoyed by higher prices and additional stores. Here, too, Dollar General is optimistic for a FY2022, anticipating a 10% boost in net sales as inflation-pinched consumers seek more savings from channels like dollar stores.
The rosier outlook comes after a tricky year. In addition to lower same-store comps, Dollar General reported that its operating profit dipped 8.7% during the fourth quarter and slid 9.4% for the year, amid the lingering pandemic and difficulties in labor, supply chains and inflation. Net income took a turn, too, decreasing 7.0% to $597.4 million for the fourth quarter and 9.6% to $2.4 billion for the fiscal year.
“For the full year, we are pleased with our net sales increase of 1.4%, which was on the high end of our guidance, and on top of a robust 21.6% increase in fiscal 2020,” said Todd Vasos, Dollar General’s CEO. “Despite a more challenging than expected operating environment, our teams remained focused on executing our operating priorities and advancing our strategic initiatives, which we believe position us well for solid sales and profit growth in 2022 and beyond.”
Like many retailers analyzing their recent financial performances, Dollar General looked at 2019 to draw parallels between recent results and the pre-pandemic “normal.” The retailer noted that same-store sales on a two-year stack basis represent the sum of the quarterly and yearly same-store sales decreases.
In its report, the retailer also recapped some its key investments and initiatives over the past several months, including the rollout of its DG Fresh concept and the execution of more than 2,900 real estate projects. Other expenditures included store improvements, upgrades, remodels, distribution and transportation projects and technology-related efforts.
Dollar General opened 1,500 new stores in 2021, remodeled 1,752 stores and relocated 100 stores. For its current fiscal year, the company has a goal of 1,110 new store openings, 1,750 remodels and 120 store relocations.
“We feel very good about the underlying strength of the business, as reflected in our full-year outlook for fiscal 2022,” remarked John Garratt, CFO. “While we anticipate a challenging first quarter due to elevated cost pressures, ongoing supply chain disruptions, and the prior year sales and gross margin comparison, both of which were positively impacted by stimulus payments, we are confident in our full year plan, including our outlook for sales and EPS growth.”
Goodlettsville, Tenn.-based Dollar General is No. 15 on The PG 100, Progressive Grocer’s 2021 list of the top food and consumables retailers in North America. Dollar General is also PG's 2021 Retailer of the Year.