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Dollar General Issues FY17 Guidance; Declares Increased Dividend

Dollar General Corp. (DG) announced, for the 52-week fiscal year ending February 2, 2018, the company expects net sales to increase four to six percent with same-store sales growth to be slightly positive to up two percent and EPS to be in the range of $4.25 to $4.50. Analysts polled by Thomson Reuters expect the company to report profit per share of $4.68. Analysts' estimates typically exclude special items.

The company's fiscal 2017 net sales guidance includes an anticipated negative impact of approximately 2 percentage points due to lapping the 2016 53rd week. The company's fiscal 2017 EPS guidance includes an anticipated negative impact totaling approximately $0.34 per share, lowering the fiscal 2017 EPS growth rate by approximately 8 percentage points.

Todd Vasos, Dollar General's CEO, said: "Dollar General is well-positioned to serve our customers with value and convenience given our plans to open approximately 1,000 new stores in 2017. To strengthen our position for the long term, we are making significant investments, primarily in compensation and training for our store managers given the critical role this position plays in our customer experience, as well as strategic initiatives. While these investments are expected to put pressure on our 2017 earnings, we believe they will strengthen our market share position over time and are positive steps to further support sustainable growth for our shareholders over the long term."

Dollar General noted that, over the longer term, the company's goal is to grow EPS at a 10 percent or higher rate on an adjusted basis.

On March 15, 2017, the Board approved an increase of four percent in its quarterly cash dividend to shareholders. The first quarter dividend of $0.26 per share will be payable on April 25, 2017 to shareholders of record of the Company's common stock on April 11, 2017.

The company's net income and EPS for the fourth quarter were $414 million and $1.49, respectively, compared to net income and EPS of $376 million and $1.30, respectively, a year ago.

Fourth-quarter net sales increased 13.7 percent to $6.0 billion compared to $5.3 billion, prior year. Net sales for the 53rd week of 2016 were $398.7 million. Same-store sales increased 1.0 percent primarily due to an increase in average transaction amount, partially offset by a slight decline in traffic that moderated from the second and third quarters. Dollar General said its fourth-quarter same-store sales were driven by positive results in the consumables and home products categories, partially offset by negative results in the seasonal and apparel categories. The net sales increase was positively affected by sales from new stores, modestly offset by sales from closed stores.

by RTT Staff Writer

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