Higher Sales and Traffic Lift Dollar General for Q4, FY25
As it moves forward with new stores and plans to meet the needs of value- and variety-minded shoppers, Dollar General looked back with a recap of its fourth quarter and fiscal year that ended Jan. 31.
Reflecting ongoing market trends and perhaps serving as a harbinger of the months ahead in a still-uncertain climate, Dollar General posted higher net sales ands sales comps, but a dip in profits attributed to store closures and other factors. The company also shared a pragmatic outlook for fiscal 2025.
Drilling down on the numbers, Dollar General reported that net sales rose 4.5% in the fourth quarter to hit $10.3 billion and same-store sales edged up 1.2%. The growth was fueled by sales from new stores and gains in same-store sales and higher sales in the consumables category as shoppers focused on essentials more than seasonal, home products and apparel items. The company has also focused on and expanded its private label grocery products to help shoppers stick to their budgets.
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For the full fiscal year, net sales climbed 5% to $40.6 billion. Same-store sales went up 1.4% on a year-over-year (YoY) basis, supported by a 1.1% increased in traffic and a 0.3% uptick in the average transaction amount.
Recent data from location intelligence and analytics firm Placer.ai supports those traffic trends. According to Placer.ai’s report, "Discount and Dollar Stores in a Strong Position to Start 2025," visits to Dollar General rose 5.1% during the full year.
“Dollar General, Dollar Tree, and Five Below’s success in 2024 was likely driven by a variety of factors including expanding store networks, consumers’ focus on value, and the rising demand for essentials. As these trends are likely to prevail in 2025, discount and dollar chains appear poised to sustain foot traffic growth,” the analysts shared.
Although sales and traffic moved higher, the retailer’s operating profit in Q4 dropped 49.2% to $294.2 million during the quarter and slid 29.9% to $1.7 billion for the full fiscal year. The declines were attributed in part to a store portfolio review in late 2024. Net income came in at $1.1 billion for FY24, below the $1.7 billion achieved the prior year.
“We were pleased with the underlying performance of the business in the fourth quarter, including improved execution and solid top-line results,” summed up CEO Todd Vasos. “As we reflect on our full fiscal 2024 year, we believe our Back to Basics work is resonating with customers, as demonstrated by higher customer satisfaction scores and healthy market share gains.”
The company is making changes to optimize its business as market headwinds are expected to continue, including the closure of 46 Dollar General stores and 45 pOpshelf stores, and converting of an additional six pOpshelf stores to Dollar General stores in the first quarter of this fiscal year. Growth plans include the opening of 575 new stores in the United States, full remodels of about 2,000 locations, and relocations of about 45 stores.
At the same time, the company has brought on new leaders and is opening new distribution centers to support expansion. Product innovation is a core tactic as well; this week, the retailer announced that is adding a kitchen and houseware collection with fellow Tennessee native Dolly Parton, with offerings such as at-home coffee bar supplies, table linens and drinkware priced at $10 and under.
As it reviews its portfolio and balances a footprint expansion with some closures Dollar General reported that it anticipates net sales growth in FY25 to land between 3.4% to 4.4% and same-store sales growth to fall between 1.2% to 2.2%.
As of Jan. 31, Goodlettsville, Tenn.-based Dollar General operated 20,594 Dollar General, DG Market, DGX and pOpshelf stores across the United States, and Mi Súper Dollar General stores in Mexico. The company is No. 17 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America.
