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Dollar General Lowers FY22 Earnings Guidance

Dollar General Corp. (DG) said, as a result of greater-than-anticipated gross margin pressures, it is updating previously issued EPS guidance for fiscal year 2022. EPS is projected in the range of $3.15 - $3.30 for the fourth quarter, which would result in growth in the range of approximately 7%-8% for fiscal 2022; compared to previous expectation in the range of approximately 12% - 14% for fiscal 2022.

Same-store sales growth is projected in a range of approximately 6% - 7% for the fourth quarter, which would result in growth toward the upper end of the company's previously expected range of 4.0% - 4.5% for fiscal 2022. Net sales growth is projected approximately 11%, for fiscal 2022.

For fiscal 2022, the company now plans to execute approximately 2,945 real estate projects, compared to previous expectation in the range of 2,930 to 2,980 projects; including 1,025 new store openings, compared to previous expectation in the range of 1,010 to 1,060 new store openings.

For fiscal 2023, the company plans to execute approximately 3,170 real estate projects in the U.S., including approximately 1,050 new store openings, 2,000 remodels, and 120 store relocations.

Third quarter reported net income was $526.2 million, an increase of 8.0% compared to $487.0 million, last year. EPS increased 12.0% to $2.33. Analysts on average had expected the company to earn $2.53 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Net sales increased 11.1% to $9.5 billion. The company said the net sales increase was primarily driven by positive sales contributions from new stores and growth in same-store sales, partially offset by the impact of store closures. Same-store sales increased 6.8%, for the quarter. Analysts on average had estimated $9.43 billion in revenue.

On November 30, 2022, the company's Board declared a quarterly cash dividend of $0.55 per share on the common stock, payable on or before January 17, 2023 to shareholders of record on January 3, 2023.

Shares of Dollar General are down 5% in pre-market trade on Thursday.

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