March 12, 2020 / 11:21 AM / a month ago

Dollar General beats profit estimates, warns of coronavirus uncertainty

FILE PHOTO: A sign is seen outside a Dollar General store in Chicago, Illinois, U.S. May 23, 2016. REUTERS/Jim Young/File Photo

(Reuters) - Dollar General Corp (DG.N) beat quarterly same-store sales and profit expectations on Thursday, as it pulled in more bargain-hungry shoppers to its stores, but warned of uncertainty around its business due to the coronavirus outbreak.

To compete with Dollar Tree Inc (DLTR.O) as well as low-priced groceries at Walmart Inc (WMT.N) and Amazon.com Inc (AMZN.O), Dollar General has added more higher-margin non-consumable products such as home decorations and party supplies to its shelves to attract more customers.

Same-store sales rose 3.2% in the fourth quarter ended Jan. 31, above analysts’ average estimate of a 2.8% increase, according to IBES data from Refinitiv.

The company forecast fiscal 2020 same-store sales growth of 2.5% to 3%, compared to analysts’ expectations of 3.1%.

Dollar General said it does not expect recent supply chain disruptions from the coronavirus outbreak to have a material impact on its fiscal 2020 earnings, but warned there was “no guarantee” the rapidly spreading virus would not have a more significant impact on its business.

Net income rose to $535.44 million, or $2.10 per share, in the fourth quarter from $483.24 million, or $1.84 per share, a year earlier. Analysts on average had estimated earnings of $2.01 per share.

Net sales rose to $7.16 billion from $6.65 billion, marginally beating estimates of $7.15 billion.

The company’s share fell 2% before the bell amid plunging broader markets.

Reporting by Uday Sampath in Bengaluru; Editing by Maju Samuel

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