What To Expect When Dollar General (DG) Reports Q1 Earnings?
Zacks Investment Research | May 29, 2017 07:59AM ET
Dollar General Corporation (NYSE:DG) is scheduled to report first-quarter fiscal 2017 results on Jun 1. In fourth-quarter fiscal 2016, the company recorded a positive earnings surprise of 5.7% following negative earnings surprises of 3.3% and 0.9% in the third and second quarters, respectively. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The current Zacks Consensus Estimate for the quarter is 99 cents, reflecting a year-over-year decline of roughly 4%. Analysts polled by Zacks anticipate revenues of $5,598 million, up over 6% from the year-ago quarter. Well the obvious question that comes to mind, will Dollar General be able to post positive earnings surprise in the first quarter. Let’s take a look at factors defining the quarter.
Factors at Play
Of late, Dollar General has been bearing the brunt of price deflation and the reduction in SNAP benefits that are weighing on comparable-store sales performance. In the final quarter of fiscal 2016, Dollar General informed that price deflation and the reduction in SNAP benefits adversely impacted comparable-store sales for fiscal 2016 by about 115 to 125 basis points. The current administration is suggesting on reducing food stamps program. Cut in SNAP benefit will hamper Dollar General performance as people with low income will have less money to spend and could restrict their spending to low margin products.
Nevertheless, we believe that the company’s commitment toward better price management, cost containment, private label offering, effective inventory management, merchandise and operational initiatives should drive sales and margin trends. Moreover, in order to increase traffic, Dollar General is focusing on both consumables and discretionary items.
Dollar General Corporation Price, Consensus and EPS Surprise
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