Dollar General Corporation (DG) has reported a 10.10 percent rise in profit for the quarter ended Feb. 03, 2017. The company has earned $414.18 million, or $1.49 a share in the quarter, compared with $376.18 million, or $1.30 a share for the same period last year. Revenue during the quarter grew 13.66 percent to $6,009.25 million from $5,286.94 million in the previous year period. Gross margin for the quarter contracted 19 basis points over the previous year period to 31.63 percent. Total expenses were 88.67 percent of quarterly revenues, up from 88.42 percent for the same period last year. That has resulted in a contraction of 26 basis points in operating margin to 11.33 percent.
Operating income for the quarter was $680.62 million, compared with $612.43 million in the previous year period.
"We are pleased with our fourth quarter 2016 financial results, and believe that during the quarter many of our initiatives continued to gain traction. For the year, we effectively managed through what proved to be a challenging retail environment to deliver same-store sales growth of 0.9% and diluted earnings per share growth of 12%, while returning nearly $1.3 billion to shareholders through the combination of share repurchases and dividends," said Todd Vasos, Dollar General's chief executive officer.
For fiscal year 2017, the company expects diluted earnings per share to be in the range of $4.25 to $4.50.
Operating cash flow improves
Dollar General Corporation has generated cash of $1,605.04 million from operating activities during the year, up 15.33 percent or $213.36 million, when compared with the last year. The company has spent $550.94 million cash to meet investing activities during the year as against cash outgo of $503.38 million in the last year. It has incurred net capital expenditure of $550.94 million on net basis during the year, up 9.45 percent or $47.55 million from year ago.
The company has spent $1,024.14 million cash to carry out financing activities during the year as against cash outgo of $1,310.18 million in the last year period.
Cash and cash equivalents stood at $187.92 million as on Feb. 03, 2017, up 18.97 percent or $29.97 million from $157.95 million on Jan. 29, 2016.
Working capital drops significantly
Dollar General Corporation has witnessed a decline in the working capital over the last year. It stood at $1,054.97 million as at Feb. 03, 2017, down 26.58 percent or $381.85 million from $1,436.81 million on Jan. 29, 2016. Current ratio was at 1.40 as on Feb. 03, 2017, down from 1.72 on Jan. 29, 2016.
Cash conversion cycle (CCC) was almost stable at 20 days for the quarter, when compared with the last year period.
Days inventory outstanding was almost stable at 39 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 19 days for the quarter, when compared with the previous year period.
Debt moves up
Dollar General Corporation has witnessed an increase in total debt over the last one year. It stood at $3,211.53 million as on Feb. 03, 2017, up 8.11 percent or $240.97 million from $2,970.55 million on Jan. 29, 2016. Total debt was 27.51 percent of total assets as on Feb. 03, 2017, compared with 26.34 percent on Jan. 29, 2016. Debt to equity ratio was at 0.59 as on Feb. 03, 2017, up from 0.55 as on Jan. 29, 2016. Interest coverage ratio improved to 26.68 for the quarter from 26.31 for the same period last year.
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