Dollar General Corporation reported record sales, net income and diluted earnings per share for its fiscal 2015 fourth quarter and full year ended January 29, 2016.
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Dollar General net income for the 2015 fourth quarter was $376 million, or diluted EPS of $1.30, compared to net income of $355 million, or diluted EPS of $1.17, in the 2014 fourth quarter.
Net sales increased 7.0 percent to $5.29 billion in the 2015 fourth quarter compared to $4.94 billion in the 2014 fourth quarter. Departments with the most significant increases in net sales were candy and snacks, perishables, tobacco, and food.
Same-store sales increased 2.2 percent, resulting from increases in both customer traffic and average transaction amount. Same-store sales increases were driven by strength in both the consumables and the non-consumables categories.
In the consumables category, growth was driven primarily by candy and snacks, tobacco and perishables. Growth in the non-consumable category was broad-based with notable strength across seasonal and home, offset by a modest decline in apparel.
The company’s gross profit, as a percentage of sales, was 31.8 percent in the 2015 fourth quarter compared to 31.7 percent in the 2014 fourth quarter, an increase of 12 basis points.
Lower transportation costs and an improved rate of inventory shrinkage were the primary factors of the improved performance, while increased markdowns were an offset.
Selling, general and administrative expenses (SG&A) were $1.07 billion in the 2015 fourth quarter, compared to $1.00 billion in the 2014 fourth quarter. For both the 2015 and 2014 quarters, SG&A as a percent of sales was 20.2 percent.
The 2015 fourth quarter results reflect increases in incentive compensation, retail salaries, and occupancy costs, offset by lower utility costs and administrative salaries as a percentage of sales. The 2014 fourth quarter results reflect expenses of $6.1 million, or 12 basis points as a percentage of sales, related to an acquisition that was not completed.
Full year 2015 net sales increased 7.7 percent to $20.4 billion compared to net sales of $18.9 billion in 2014.
Departments with the most significant increases in net sales were candy and snacks, perishables, tobacco, and food.
Same-store sales increased 2.8 percent, including increases in both customer traffic and average transaction amount resulting from the refinement of the company’s merchandise offerings, as well as increases in candy and snacks, tobacco products and perishables, and increased utilization of store square footage.
In addition, all four product categories contributed to same-store sales growth.
The Company’s gross profit rate was 31.0 percent of sales in 2015 compared to 30.7 percent in 2014, an increase of 27 basis points.
The majority of the gross profit rate increase in 2015 as compared to 2014 was due to lower transportation costs and an improved rate of inventory shrinkage, partially offset by increased markdowns. The Company recorded a LIFO benefit of $2.3 million in 2015 compared to a LIFO provision of $4.2 million in 2014.
Full year SG&A was 21.4 percent of sales in 2015 compared to 21.3 percent in 2014, an increase of 10 basis points.
The 2015 SG&A results reflect increases in incentive compensation expenses, repairs and maintenance expenses, occupancy costs, and fees associated with an increase in debit card transactions.
Partially offsetting these items was a higher volume of cash back transactions resulting in increased convenience fees collected from customers. The 2014 SG&A results reflect expenses of $14.3 million, or 8 basis points as a percentage of sales, related to an acquisition that was not completed. ■