Dollar General stock moves up on Q4 same-store sales
Shares of Dollar General (DG) are trading slightly higher as the company posted its fourth-quarter report, revealing an improvement in same-store sales by 0.7%. In addition, the company forecasted first-quarter same-store sales that were higher than expected. The company beat revenue expectations posting $9.86 billion in revenue for the quarter against an expected $9.78 billion.
Yahoo Finance Anchors Seana Smith and Jared Blikre break down the latest development for Dollar General and what it could mean for the discount retailer moving forward.
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Editor's note: This article was written by Nicholas Jacobino
Video Transcript
SEANA SMITH: Dollar General shares moving to the upside, up just about 1.5% in early trading. Same-store sales coming in better than expected climbing 7/10 of a percent from a year ago. Now, the discount retailer also giving first quarter same-store sales estimates above expectations.
So a bit of a different story playing out at Dollar General than what we saw at Dollar Tree yesterday, especially when you take a look at the stock reaction here today. But again, some strength at Dollar General is showing in their same-store sales and that's offsetting some of the weakness that the company saw in its apparel, and its seasonal goods, and also in its home products divisions there. So not strength across the board, but enough to beat the Street's expectations here, Jared.
JARED BLIKRE: Yeah, and those expectations, it was a low bar, let me just say that. If we go to the Wi-Fi interactive, I'm going to chart the price action. First, this is over the last five years so this covers the pandemic. You can see a pretty steady rise here, but then peaking out at the end of 2022.
By the way 2022, which was when the general market was in a bear market, Dollar General Staple Company outperformed, but then just fell off a cliff. Here's the two-year chart and you can really see some of the losses there down about 23%. Although year to date now with the 1% or 3/4 of 1% gain here. It's up 17%.
I do have some Street reaction. Here's Truist, which rates it a hold with a price target of $125. While we think Dollar General is making needed improvements to its business, the stock is already trading well above its historical relative valuation despite relatively little or no growth. And so it's trading above that level, which means that traders are too optimistic at least in terms of this one analyst.
