Goodlettsville, Tenn. -- Dollar General on Thursday reported a 1.5% rise in fourth-quarter profits, below analysts’ estimates, as the retailer felt the impact of harsh winter weather, along with increased competition and low consumer confidence. The company also said it plans to open approximately 700 new stores in 2014.
The retailer earned $322.2 million in the quarter ended Jan. 31, compared with $317.4 million a year earlier.
Revenue rose 6.8% to $4.49 billion, which was below the Street’s expectations. Same-store sales increased 1.3%.
“Sales in the fourth quarter were impacted by severe winter weather, including many days with significant store closures, an aggressive competitive retail landscape and our customers` uncertainty about spending in the current economic environment,” Dollar General CEO Rick Dreiling said in a statement.
For the full year, Dollar General earned $1.03 billion, up from $952.7 million the year before. Revenue rose to $17.5 billion from $16.02 billion.
Same-store sales rose 1.3% in 2013. It was Dollar General’s twenty-fourth consecutive year of same-store sales growth.
For 2014, Dollar General has budgeted $450 million to $500 million for capital expenditures, and plans to open 700 new locations. This comes on top of a record year of square footage expansion in 2013.
“Among our other many accomplishments for the year, we successfully opened 650 new stores, ending the year with 11,132 stores serving customers in 40 states,” Dreiling said. “Dollar General is a strong and growing business with high return store growth opportunities that we intend to capture. While we remain cautious on the current operating environment and the many challenges our customer is facing in 2014, we have a business model that generates significant cash flow, putting us in a position to invest in these growth opportunities, while continuing to return cash to shareholders through share repurchases.”