Dollar General remains committed to buying Family Dollar
Goodlettsville, Tenn. — Dollar General Corp. on Thursday reported earnings of $251.3 million for the second quarter, in line with expectations, even as its sales decelerated. The company also said it still wants to buy Family Dollar Stores, even though the rival discounter rejected Dollar General’s bid of its $8.95 billion offer last week.
"We remain firmly committed to the acquisition," Dollar General CEO Rick Dreiling said in a statement on Thursday. “The financial benefits of our offer to Family Dollar shareholders are indisputable, and the proposed combination would unlock tremendous value for Dollar General shareholders.”
Family Dollar accepted a slightly smaller one from rival Dollar Tree Inc. for about $8.5 billion, saying the bid by Dollar General would face roadblocks from antitrust regulators. Dreiling has dismissed those concerns, and the chain has said it could secure regulatory approval with the divesture of as many as 700 stores.
“We continue to believe the potential antitrust issues are manageable and that our transaction as proposed is both superior and achievable," Dreiling said.
A deal between Dollar General and Family Dollar would create a combined company with a nationwide footprint of some 20,000 locations.
Dollar General’s revenue in the quarter, ended Aug. 1, rose 7.5% to $4.72 billion in the second quarter, missing Street forecasts of $4.76 billion. The retailer cited a competitive environment and consumers who remain cautious in their spending.
Same-store sales increased 2.1%, with increases in both customer traffic and average transaction value.
“Dollar General’s second quarter sales trends improved over the first quarter as we grew both customer traffic and average ticket for the 26th consecutive quarter,” said Dreiling.
Sales of consumables continued to outpace sales of non-consumables with the most significant growth in categories such as tobacco, perishables, candy and snacks. The company said it also saw solid same-store sales growth was also reported in the home and apparel categories.
The competitive environment cited by Dreiling prompted Dollar General to increase promotional activities which caused gross margins to decline 53 basis points to 30.8%. The other source of ongoing margin pressure is the fact that Dollar General continues to derive a larger percentage of its sales from lower margin consumable categories such as tobacco and perishables.
“As we enter the third quarter, we are seeing our sales momentum pick back up and expect that momentum to build as our initiatives gain traction with our customers,” Dreiling said. “For the second half of the year, we are well positioned to serve our customers and provide them with the everyday low pricing they count on from us.”
NRF taps new VP retail programs
The National Retail Federation has hired Mary Heitman as VP of retail programs.
Heitman previously served as director of events and deputy director of development for the Trust for the National Mall, where managed corporate sponsorships and events designed to increase donor engagement, identified and cultivated prospects and leveraged relationships in the government affairs and corporate community. Prior to the Trust for the National Mall, she owned and operated a private marketing and fundraising firm and served as finance director for the Republican National Committee.
At NRF, Heitman will be responsible for expanding and managing key strategic initiatives and programs within the organization’s communities, including Shop.org, the Association for Retail Technology Standards, marketing, loss prevention and IT.
La-Z-Boy announces executive appointments
La-Z-Boy has named Doug Collier as SVP of La-Z-Boy Incorporated, chief marketing officer and president, international, and has named Darrell Edwards as SVP of La-Z-Boy Incorporated and chief supply chain officer.
Collier rejoined La-Z-Boy in June 2007 after two years with Select Comfort as chief marketing officer and SVP of marketing. Prior to Select Comfort, Collier held various leadership positions at La-Z-Boy from 2002 through 2005, including VP of marketing and furniture galleries development.
Edwards joined La-Z-Boy Incorporated in 2004 as GM of the company's Newton, Mississippi, plant and held various positions of increasing responsibility, including VP of manufacturing, before being named SVP of operations for the La-Z-Boy branded business.
"Doug and Darrell are integral members of the La-Z-Boy Incorporated leadership team and will continue to play increasingly important roles as we execute our strategic initiatives and develop additional strategies to drive profitable growth throughout the company," Kurt L. Darrow, chairman, president and CEO of La-Z-Boy, said.