After reporting mixed revenue and earnings for the second quarter of its 2014 fiscal year on August 28, shares of Dollar General (NYSE:DG) inched up almost 1% to close at $64.20. According to its press release, revenue for the quarter came in at $4.72 billion. Although this represents an almost 8% gain over the $4.39 billion management reported the same quarter a year earlier, the company fell short of the $4.77 billion analysts anticipated. This increase in sales was driven, in part, by a 2.1% improvement in comparable store sales, with the rest of the jump being chalked up to an increase in store count year-over-year.
|Earnings per Share (adj.)||$0.77||$0.83||$0.83|
From a profit standpoint, Dollar General did slightly better. For the quarter, the discount giant reported earnings per share of $0.83. This matched analyst expectations and came in 11% above the $0.75 reported the same time a year ago and 8% greater than the $0.77 in adjusted profits the retailer earned. In addition to benefiting from an increase in revenue, the business saw profits increase because of a nearly 7% decline in share count.
In a previous article I wrote on Dollar General, I highlighted that while expectations were high for the quarter, the business's long-term performance implies that there's a lot of upside to be had. Given its strength in the industry, combined with the potential for a buyout of Family Dollar (NYSE:FDO), Dollar General makes for an interesting long-term prospect but with shares trading for 20 times profits, it's far from being a bargain.
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