December 4, 2014
Even if Dollar General is unsuccessful in acquiring Family Dollar, the company plans to get bigger faster in 2015 by opening two stores every day and enhancing the productivity of an already expansive footprint.
Dollar General said Thursday it will open 730 new stores in 2015 and enter new states such as Maine, Rhode Island and Oregon. Combined with the remodel or relocation of another 875 stores, the investment in physical stores will see Dollar General expand selling space by 6 percent on top of its existing store base of 11,715 locations. The 2015 growth targets compare to this year’s expansion program which will see the company open roughly 700 stores and relocate or remodel another 900 locations by the time its fiscal year ends in January.
The update on growth was made in conjunction with the release of solid third quarter results in which the company tempered fourth quarter profits expectations and reaffirmed its commitment to acquiring Family Dollar, a company which has already reached a merger agreement with Dollar Tree.
“Our affordability-focused initiatives continued to gain traction with our customers in the third quarter, and our same-store sales growth of 2.8 percent reflected increases in both customer traffic and average ticket for the 27th consecutive quarter,” said Rick Dreiling, Dollar General’s chairman and CEO. “We continued to grow our market share in consumables, and we are very pleased with the performance of our home and apparel categories. Importantly, we are seeing a significant step up as we start the holiday season, and we expect to achieve same-store sales growth of approximately 5 percent for the fourth quarter.”
The top line sales growth is expected to help the company achieve the middle of a previously provided full year profits forecast which calls for earnings per share of $3.45 to $3.55.
“We have continued confidence that we are well-positioned for sustainable growth and creation of shareholder value,” Dreiling said. “Finally, we remain committed to acquiring Family Dollar. We expect to provide an update on our offer in time for Family Dollar shareholders to review such information prior to the Family Dollar shareholders’ meeting scheduled for December 23, 2014.”
Source: Retailing Today
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