Dollar General Q1 profit climbs 15%, on track to open 625 stores
Goodlettsville, Tenn. — Dollar General Corp. reported Wednesday that profit for the quarter ended April 29 surged 15% to $157 million, compared with $136 million in the year-ago period.
Revenue rose 11% to $3.45 billion from $3.11 billion, beating Wall Street expectations of $3.42 billion. Same-store sales climbed 5.4%.
The discounter plans to open about 625 new stores and to remodel or relocate 550 stores in 2011. Capital expenditures are expected to be in the range of $550 million to $600 million, according to Dollar General.
Survey: Retail industry capital spending to rise 16% in 2011
New York City — Capital spending for the retail industry is expected to increase 16% in 2011 to $42.5 billion, with all sub-segments projecting double-digit percentage increases (except for mass merchants, whose growth is projected to rise 9%), according to a survey by Equity Research.
Although capital spending will be up, it remains well below 2007’s peak of $56 billion. Also, unlike these peak years when a significant portion of spending was dedicated to new store growth, the emphasis will be on maintenance, infrastructure upgrades, e-commerce, and remodels.
“Overall, we believe a more rational capital strategy in terms of growth continues to be the right approach at this stage of the maturity curve for the industry,” the report said. “The key will be in managing the fixed asset base to further improve returns.”
In other findings:
- In 2010, retail industry cash capital spending decreased 0.3% to $36.7 billion, as measured by Equity’s survey of 76 companies, compared with a 23.4% decrease in ’09, which was the largest decrease in the history of the survey, which dates back to 1991).
- Food & drug retail led the decline in 2010, spending 24% less on a year-over-year basis. However, all other retailers actually increased spending year over year spending. Softlines increased spending by (+32%), followed by mass merchants (+7%), hardlines (+5%), and mall anchors (+4%).
- Total inventory turnover for the industry improved for the 5th consecutive year and payables as a % of inventory fell 115 basis points to 67.7% in 2010.
- Spending on merger and acquisitions increased 170% year over year to $1.4 billion in 2010, a dramatic rise in percentage terms, but absolute spending remained lower than at any other point in the survey’s history, besides the $515 million seen in 2009.
Macy’s May sales rise 7.4%
Cincinnati — The day before most retailers report monthly results, Macy’s said Wednesday that same-store sales climbed 7.4% in May and total revenue rose 8.5% to $1.94 billion.
The department store operator also raised its expectations for the second quarter, saying it now expects second quarter same-store revenue to climb about 5%. Its prior forecast called for an approximately 4% increase.
“We continued to see very strong sales results in May as every Macy’s stores region, Bloomingdale’s stores, macys.com and bloomingdales.com all met or exceeded our aggressive expectations,” said Terry J. Lundgren, chairman, president and CEO. “We can attribute this success to the continued crisp execution of our major strategies.”