Quarterly profit rose to $222.5 million or 65 cents in the three months ended Jan. 28, up from $87.2 millionj or 26 cents a share, a year earlier. Revenue rose 9% to $3.49 billion from $3.19 billion, and same-store sales were up 3.8%. Analaysts’ average estimate forecast 59 cents on sales of $3.52 billion.
Gross margin widened by 23 percentage points to 32.4%, helped by lower inventory shrinkage and lower purchasing costs from vendors.
2010 Results Soar Too
While weather impacted the store’s sales momentum in the second half of the fourth quarter, Rick Dreiling, chairman and ceo, said “we effectively balanced our sales, delivering gross margin expansion, expense leverage and excellent financial results.”
For the full year, net income soared 85% to $628 million or $1.82 per share, from $339 million or $1.04 per share the year before. Net sales increased 10.5% to $13.04 billion, and same-store sales rose 4.9%.
Looking ahead, the company expects to deliver top-line growth of 11% to 13% in the year, and same-store sales growth of 3% to 5%. Analysts’ average estimate is for the company to earn $2.15 and reach sales of $14.26 billion.
The discount retailer also plans to open 625 new stores and remodel or relocate another 550 stores in 2011, with capital expenditures in the range of $550 million to $600 million.
In a conference call with analysts, Dreiling refused to speculate on rumors that Dollar General may try to acquire rival Family Dollar stores.