Dollar stores perform strongly in Q3

Keshia Beadle
Senior Retail Analyst

Date : 07 December 2019

Both Dollar General and Dollar Tree have reported strong Q3 results, with Dollar General exceeding expectations.

Dollar General to open 1,000 new stores in 2020

Dollar General has announced plans to open 1,000 new stores in 2020 and complete 1,500 store remodels. This will be an increase from 2019, where it is expected to open 975 new stores and complete 1,000 remodels by the end of the year.

Its Q3 results saw same store sales grow by 4.6%, its highest growth in almost five years. Net sales increased by 8.9% and profit was up 11.1%. These strong results were driven by increased customer traffic, as well as an increase in the average spend. It maintains its focus on delivering value and convenience to customers and saw particularly strong growth in the grocery, home, seasonal and clothing categories.

Following its strong performance this quarter, the financial growth estimate for the year has been raised, with same store sales forecast to grow in the mid to high 3% range and net sales to grow by 8%. Profit growth is expected to be 6-8% and was previously forecast at 5-7%.

Dollar Tree also performed well

The Q3 results for Dollar Tree saw same store sales increase by 2.5% and net sales grow by 3.7%. Both its banners performed well, with same store sales up 2.8% at Dollar Tree and up 2.3% at Family Dollar. This year has seen it accelerate store optimisation efforts at Family Dollar and the retailer has consolidated its two store support centres into one, helping integrate the businesses further. Other initiatives include the rollout of Dollar Tree Snack Zones, with more than 1,000 now in operation.

Sales for 2019 are expected to range between $23.62bn and $23.74bn, which is based on a low single digit increase in same store sales and a growth of 1.1% in sales space. In 2020, it plans to remodel a further 1,000 Family Dollar stores and continue to improve efficiencies across the businesses.

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