Dollar General CorporationNYSE
Wed, Oct. 26, 9:38 AM
- CLSA turns around on Dollar General (DG +0.2%) with a timely two-notch upgrade to Outperform from Underperform.
- The running theory on the discounter is that it's sheltered from the Amazon Effect and is in the right pocket of retail.
- Shares of Dollar General trade almost 30% below their high from July after a disappointing Q2 earnings report. The company isn't due to spill numbers on Q3 until December 1.
Thu, Oct. 13, 10:31 AM
- KeyBanc has discounters on its mind.
- Five Below (FIVE -0.9%) earns an Overweight rating and price target of $47 from the investment firm.
- Dollar Tree (DLTR) also catches an Overweight initiation. "DLTR is a compelling multi-faceted story, supported by a strong execution at legacy DLTR, as well as a synergy and turnaround story at legacy FDO, acquired in 2015," writes analyst Bradley Thomas.
- Dollar General (DG -0.6%) is started at Sector Weight.
- YTD comparison: FIVE +19.9%, DG -4.4%, DLTR +0.3% vs. S&P Retail ETF -0.5%.
Sat, Oct. 8, 9:09 AM
- Retailers want the U.S. election over and quick. The negative tone has created a degree of uncertainty with consumers that has impacted spending and traffic patterns, according to a host of top execs.
- "There is just great uncertainty as to what is going to happen in the U.S. in particular as a result of the outcome of the election," noted Yum Brands (NYSE:YUM) CEO Greg Creed recently. "People may be hunkering down a little bit," he added.
- Expect the topic to be raised on a large number of Q3 earnings calls over the next month to explain away revenue misses.
- It's not an excuse that everyone is buying into. Retail Metrics president Ken Perkins doubts that daily shopping needs are cut short by election fascination and notes consumer confidence is measuring high. Then there's Amazon (NASDAQ:AMZN) which seems to be rolling right along without any Clinton-Trump fatigue.
- Beyond the election wildcard, two underestimated factors impacting some retailers in a more concrete way are the lower level of SNAP (food stamps) benefits being paid out by the government and the elevated cost of health care. There is also the massive challenge with a millennial generation that shuns chains. Just ask anyone in the restaurant sector (NASDAQ:BITE).
- Add it all up and it makes for a challenging period for a mix of retailers that includes Dollar General (NYSE:DG), Dollar Tree (NASDAQ:DLTR), Fred's (NASDAQ:FRED), Ross Stores (NASDAQ:ROST), Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Staples (NASDAQ:SPLS), McDonald's (NYSE:MCD), Popeyes Louisiana Kitchen (NASDAQ:PLKI), Wendy's (NYSE:WEN), Supervalu (NYSE:SVU), Kroger (NYSE:KR), SIgnet (NYSE:SIG), TJX Companies (NYSE:TJX), and Casey's General Stores (NASDAQ:CASY).
- Retail ETFs: XLY, XRT, VCR, RTH, RETL, IYK, FXD, IYC, FDIS, SCC, RCD, UCC, PMR, UGE, SZK, CNDF, FTXD, JHMC.
Thu, Oct. 6, 3:08 PM
- There's an interesting move higher in Dollar General (DG +2.8%) and Dollar Tree (DLTR +4%) today that could have its roots in the Wal-Mart investor meeting going on in Arkansas.
- The retail giant disclosed a subdued plan to add stores in the U.S. as part of its major commitment to growing out its e-commerce business.
- Investors could be taking that as a sign that Wal-Mart is ceding some ground to the discounters.
- Previously: Wal-Mart execs in the spotlight at investment meeting (Oct. 6)
- Previously: E-commerce the star at Wal-Mart investor meeting (Oct. 6)
Tue, Oct. 4, 10:11 AM
- Cleveland Research downgrades Dollar Tree (DLTR -3.2%) to a Neutral rating from Buy after channel checks indicate a slowdown in sales trends.
- Headwinds in the discounter space include increased competition, price deflation in key categories, and a reduction in SNAP benefits.
- The investment firm's dour outlook on the sector is hitting Dollar General (DG -1.5%) and Fred's (FRED -2.2%) as well.
Thu, Sep. 15, 11:56 AM
Thu, Sep. 15, 9:02 AM
- Retail sales fell in August on a month-over-month comparison. The drop wasn't a large surprise considering the onslaught of warnings from the retail sector on store traffic.
- 8 out of the 13 retail categories showed negative growth during the month, with the largest drops recorded in the building material/garden equipment/supplies dealers and miscellaneous store retailers categories. The broad weakness turned on its head the argument that money freed up from a lower level of auto sales would be funneled into other consumer purchases.
- Food services and drinking places showed a +0.9% M/M and +5.8% Y/Y increase in a somewhat surprising result considering the harsh read from Black Box Intelligence on August same-store sales in the restaurant sector BITE. Is the discrepancy an indication that independent restaurants are taking market share?
- On a year-over-year basis, retail sales were up 1.9%. As expected the Amazon-influenced nonstore retailers category did the heavy lifting with an 11% gain. Larger U.S. retail chains (WMT, SPLS, TGT, BBY, DG, COST, KR, WBA, CVS, LOW, HD, SWY) have been raising the issue of pricing pressure in recent conference presentations and guidance updates which could be a nagging sales deflator for the balance of the year.
- Previously: Retail sales disappoint in August (Sept. 15)
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, PBJ, IYK, FXD, IYC, RHS, FDIS, PEJ, FSTA, PSL, SCC, RCD, UCC, PEZ, PMR, PSCC, UGE, PSCD, SZK, BITE, CNDF, CNSF, IBUY, JHMC, JHMS.
Wed, Aug. 31, 4:37 AM
- Atlantic Equities analyst Sam Hudson downgrades Dollar General (NYSE:DG) to Neutral from Overweight.
- Lowers price target to $78 from $99, citing a lack of near-term transparency. The target is 11% lower than the consensus average of $87.80.
- Shares fell 2.4% on Tuesday to $75.65.
Fri, Aug. 26, 8:24 AM
- UBS sticks with a Buy rating on Dollar General (NYSE:DG) after factoring in the company's Q2 earnings report.
- The sequential slowdown in comparable sales at Home Depot, Lowe's, O'Reilly Automotive, and others makes UBS question if Dollar General's biggest problem was losing market share to Wal-Mart.
- "We expect that DG’s comp can accelerate as the overall spending environment improves. In the meantime, we think the stock has already priced in a lot of risk," writes analyst Michael Lasser.
- The investment firm lowers its price target to $92 from $101.
Fri, Aug. 26, 8:18 AM
- Disappointing earnings reports from Dollar Tree (NASDAQ:DLTR) and Dollar General (NYSE:DG) have thrown a spotlight back on the reduced amount of benefits being paid out from the Supplemental Nutrition Assistance Program. While health care cost inflation is a major consideration for retailers with a high mix of low-income customers, the SNAP program factors in as well.
- The issue has been used by executives in the retail sector sporadically in the past as an excuse/explanation for soft sales, but it has added significance in an election year. Both Donald Trump and Hillary Clinton have promised to improve the food stamp program, although in different manners.
- The companies listed below talked about the impact of food stamps on their recent earnings conference calls.
- SpartanNash Company Earnings Call Transcript
- Alimentation Couche-Tard Earnings Call Transcript
- Papa Murphy's Earnings Call Transcript
- Dollar Tree Earnings Call Transcript
- Dollar General Earnings Call Transcript
- Related stocks: BIG, FIVE, WMT.
Thu, Aug. 25, 12:45 PM
Thu, Aug. 25, 9:35 AM
- A common theory from analysts is that dollar stores are in the sweet spot of retail - somewhat shielded from the Amazon Effect and geared toward a demographic in which consumers are seeing a meaningful benefit from higher wages and low gas prices.
- That premise could be questioned after discounters Dollar Tree (DLTR -6.9%) and Dollar General (DG -10.8%) both disappointed with their Q2 earnings and were perhaps surprisingly outperformed by retail giant Wal-Mart (WMT +0.2%).
- Though the reporting periods don't match up exactly, Wal-Mart showed a 1.6% increase in U.S. comparable sales in Q2 to top Dollar General's 0.7% mark and Dollar Tree's 1.2% pace. It should be noted that at Wal-Mart's scale every basis point of comp gain means a significant amount of extra revenue to help lever down costs.
- In early trading, Five Below (FIVE -3.7%) and Big Lots (BIG -3.4%) are both lower due to the dollar store earnings disappointment.
Thu, Aug. 25, 9:16 AM
Thu, Aug. 25, 7:14 AM
- Dollar General (NYSE:DG) reports same-store sales rose 0.7% in Q2 driven primarily by an increase in average transaction amount.
- Sales by category: Consumables: $4.12B (+6.4%); Seasonal: $673.95M (+4.9%); Home products: $315.6M (+3.7%); Apparel: $285.89M (+1.6%).
- Gross profit rate grew 2 bps to 31.19%.
- SG&A expense rate -8 bps to 21.75%.
- Operating profit rate expanded 10 bps to 9.44%.
- Inventory +8% Y/Y to $3.27B.
- Store count +769 Y/Y to 12,967.
- FY2016 Guidance: Diluted EPS: +10% to +15%;Capex: $580M to $630M.
- DG -5.22% premarket.
Thu, Aug. 25, 7:06 AM
Thu, Aug. 25, 6:57 AM