Dollar General, Dollar Tree And Best Buy Q1 Profit Beats Estimates

Dollar General Corp. (DG) reported a profit for the first-quarter that increased 4.2 percent from the prior year. Dollar Tree Inc.’s (DLTR) first-quarter profit climbed 51.3 percent from last year. Electronics retailer Best Buy Co. Inc.’s (BBY) first-quarter net earnings soared from the previous year.

The retailers’ quarterly profit beat analysts’ expectations.

Dollar General raised its annual guidance. Dollar Tree expects annual profit will be below analysts’ estimates. Best Buy raised its annual enterprise comparable sales growth outlook.

For fiscal year 2021, Dollar General now projects earnings in a range of $9.50 to $10.20 per share on net sales change between a decline of 1 percent and 1 percent growth, with same-store sales decline in the 3 to 5 percent range. Previously, the company expected earnings in a range of $8.80 to $9.50 per share on net sales change between a decline of 2 percent and flat, with same-store sales decline in the 4 to 6 percent range.

On average, analysts polled by Thomson Reuters expect the company to report earnings of $9.58 per share on net sales growth of 0.5 percent to $33.91 billion for the year. Analysts’ estimates typically exclude special items.

For full-year fiscal 2021, Dollar Tree estimates earnings per share will range between $5.80 and $6.05. The estimate assumes a consolidated comparable store net sales increase in the low single digits. Analysts expect annual earnings of $6.24 per share.

Best Buy projects enterprise comparable sales growth of approximately 17 percent for the second quarter.

Best Buy raised its fiscal 2022 enterprise comparable sales growth outlook to a range of 3 to 6 percent from the prior forecast between a decline of 2 percent and 1 percent growth.

Dollar General’s net income was $677.7 million in the first quarter of 2021, an increase of 4.2 percent from $650.4 million in the first quarter of 2020. Earnings per share increased 10.2 percent to $2.82 from $2.56 in the previous year. Analysts expect the company to report earnings of $2.19 per share for the first-quarter.

The company said it believes its first quarter results were positively impacted by consumer behavior related to government stimulus payments that had a significant positive effect on sales in its non-consumable product categories.

Net sales for the first-quarter decreased 0.6 percent to $8.4 billion from the prior year’s $8.4 billion, hurt by a decline in same-store sales, as well as the impact of store closures, partially offset by positive sales contributions from new stores. Analysts expected revenues of $8.28 billion for the first-quarter.

Same-store sales decreased 4.6% compared to the first quarter of 2020, hurt by a decline in customer traffic, partially offset by an increase in average transaction amount. Same-store sales in the first quarter of 2021 included a decline in the consumables category, partially offset by growth in the seasonal, apparel, and home products categories.

On Tuesday, the company’s Board of Directors declared a quarterly cash dividend of $0.42 per share on the Company’s common stock, payable on or before July 20, 2021 to shareholders of record on July 6, 2021.

The company is also reiterating its plans to execute 2,900 real estate projects in fiscal year 2021, including 1,050 new store openings, 1,750 store remodels, and 100 store relocations.

Dollar Tree’s net income for the first quarter climbed 51.3 percent to $374.5 million from last year, with earnings per share increasing 53.8 percent to $1.60, from $1.04 in the prior year. Analysts expect the company to report earnings of $1.40 per share for the first-quarter.

Consolidated net sales increased 3.0 percent to $6.48 billion from $6.29 billion in the prior year’s first quarter. Analysts expected revenues of $6.42 billion for the first-quarter.

Enterprise same-store sales increased 0.8 percent on a constant currency basis or 0.9 percent when adjusted to include the impact of Canadian currency fluctuations. Same-store sales for Dollar Tree increased 4.7 percent. Family Dollar same-store sales decreased 2.8 percent, compared to a very strong 15.5 percent increase in the prior year’s first quarter. The banner’s first quarter same-store sales increase, on a two-year stacked basis, was a strong 12.7 percent as the Family Dollar brand continues to gain market share with its great value and compelling mix of products.

Best Buy Co.’s first-quarter net earnings soared to $595 million or $2.32 per share from $159 million or $0.61 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter was $2.23 per share, compared to $0.67 per share a year ago. On average, 21 analysts expected the company to report earnings of $1.37 per share for the quarter.

Revenues for the quarter increased to $11.64 billion from $8.56 billion in the same quarter last year. Analysts had a consensus revenue estimate of $10.34 billion.

Enterprise comparable sales rose 37.2 percent, compared to a decline of 5.3 percent last year.

Domestic revenue was $10.84 billion up 37.0 percent from last year. The increase was primarily driven by comparable sales growth of 37.9 percent, which was partially offset by the loss of revenue from permanent store closures in the past year.
International revenue of $796 million increased 23.0 percent versus last year. The increase was primarily driven by comparable sales growth of 27.8% and the benefit of approximately 1,000 basis points of favorable foreign currency exchange rates.

The company also announced that its board has authorized the payment of a regular quarterly cash dividend of $0.70 per common share, payable on July 8, 2021, to shareholders of record as of the close of business on June 17, 2021.

In Thursday regular trading, DG was trading at $207.00 up $7.02 or 3.51 percent. BBY was trading at $119.82 up $2.86 or 2.45 percent. But DLTR was trading at $100.35 down $8.12 or 7.49 percent.

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