High unemployment and falling household income this year due to
the COVID-19 crisis have boosted demand for lower-priced
cereals, vegetables and other essentials, lifting sales at
dollar stores.
The strong demand also carried through to the current quarter,
with Dollar General reporting same-store sales growth of about
14% for the period between Oct. 31 and Dec.1.
Still, the company did not provide a forecast for the rest of
the year, like its peer Dollar Tree, citing the uncertainty
caused by the pandemic.
Shares of Dollar General, which typically sells products for $10
or less, were down nearly 3% in premarket trading after having
risen about 40% so far this year.
Dollar General has stores concentrated in rural locations, which
makes them a one-stop place for customers - who have few other
options nearby - to buy everything from home decor, party
supplies to everyday essentials.
For the third quarter ended Oct. 30, Dollar General posted sales
and same-store sales that beat analysts' expectations as people
bought more on average despite cutting down on the number of
trips.
Net income rose to $574.26 million, or $2.31 per share, from
$365.55 million, or $1.42 per share, a year earlier.
Analysts on average were expecting a profit of $2.00 per share,
Refinitiv IBES data showed.
(Reporting by Mehr Bedi in Bengaluru; Editing by Arun Koyyur,
Aditya Soni)
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