Dollar General Corp. (NYSE:DG) will release first quarter 2014 earnings before the market open on Tuesday, June 3, 2014. On the same day, Rick Dreiling, Dollar General's chairman and chief executive officer, and David Tehle, chief financial officer, plan to host a one hour conference call beginning at 9:00 a.m. CT/10:00 a.m. ET to discuss the Company's financial results for the quarter.
Wall Street anticipates that the discount retailer will earn $0.73 per share for the quarter, which is $0.02 more than last year's profit of $0.71 per share. iStock expects DG to hit Wall Street's consensus number, the iEstimate is $0.73, too.
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Sales, like earnings, are expected to rise, increasing a healthy 7.7% year-over-year (YoY). Dollar General's consensus revenue estimate for Q1 is $4.56 billion, which is more than last year's $4.23 billion.
Dollar General Corporation is a discount retailer in the United States. As of February 28, 2014, it operated 11,215 stores located in 40 states, primarily in the southern, southwestern, midwestern and eastern United States. The Company offers a selection of merchandise, including consumables, seasonal, home products and apparel. The Company's merchandise includes national brands from manufacturers, as well as private brand selections with prices at substantial discounts to national brands. It offers its merchandise at everyday low prices through its convenient small-box (approximately 7,200 square feet) locations.
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DG has been a solid bullish EPS surprise generator. The Discount, Variety Stores operator topped Wall Street's consensus estimate 14 of the last 16 quarters. Typically, DG earned $0.04 more than analysts projected with a range of $0.01 to $0.08 beyond the street view.
Meanwhile, the pair of misses was small at -$0.01 and -$0.02 less than the forecast. Unfortunately, Q1 or the June announcement produced both bearish surprises. In fact, the Pearl month has been tough on shareholders. The stock backed up in the days surrounding three of the last four quarterly checkups, losing -2.4%, -4.8%, and -7% while gaining just 0.9% for the lone green reaction.
Costs rising faster than sales could be the reason this June might struggle too. In 2014, operating profit margin fell to 9.92% of sales from 10.33% in 2013. That might not sound like much, but it the difference was $72 million in 2014 or $0.23 per share less in operating profits.
On a positive note, inventory rose at a slower pace than sales (6.5% v. 9.25%) and actually fell on a per-store basis.
Overall: Dollar General Corp.'s (NYSE:DG) June history and shrinking operating margin suggests it is best to stay away from DG before the first quarter earnings announcement.