Dollar General posts Q3 loss despite sales jump
Nashville Business Journal
Dollar General Corp. reported a net loss of $7.3 million in the third quarter of 2008, compared to a net loss of $33 million in the 2007 third quarter.
Goodlettsville, Tenn.-based Dollar General says in a release the loss came after recording pre-tax costs of $34.5 million related to the proposed settlement of a shareholder lawsuit that arose out of the merger with KKR.
Sales for the quarter increased 12.4 percent to $2.6 billion compared to $2.31 billion in the third quarter of fiscal 2007. Same store sales increased 10.6 percent. The discount chain cites increased customer traffic and average transaction amounts as contributors to the sales increase.
The third quarter 2008 gross profit rate increased to 29.7 percent from 28 percent from the prior year, driven in part by higher average markups, lower markdowns and distribution efficiencies, Dollar General reports
Dollar general says the profit boost more than offset increased fuel costs and a LIFO charge of $15.7 million resulting from continued inflation.
Selling, general and administrative expenses represented 24.4 percent of sales in the 2008 third quarter, down from 25.1 percent in the 2007 third quarter.
For the 39-week year-to-date period, total sales increased 9.7 percent, including an 8.8 percent increase in same store sales.
“We are very pleased to report strong results again for the third quarter, particularly given the difficult economic environment,” says Rick Dreiling, Dollar General’s chairman and CEO, in the release.
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