Dollar General Earnings Sneak Peek

Dollar General (NYSE:DG) will unveil its latest earnings on Tuesday, December 11, 2012. Dollar General is a discount retailer in the United States and operates convenient-sized stores that deliver everyday low prices on products that families use every day.

Dollar General Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 60 cents per share, a rise of 20% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. For the year, analysts are projecting net income of $2.86 per share, a rise of 21.7% from last year.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 5 cents, reporting profit of 69 cents per share against a mean estimate of net income of 64 cents per share.

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A Look Back: In the second quarter, profit rose 46.6% to $214.1 million (64 cents a share) from $146 million (42 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 10.4% to $3.95 billion from $3.58 billion.

Wall St. Revenue Expectations: Analysts predict a rise of 10% in revenue from the year-earlier quarter to $3.96 billion.

Stock Price Performance: Between October 9, 2012 and December 5, 2012, the stock price had fallen $3.61 (-7.2%), from $50.21 to $46.60. The stock price saw one of its best stretches over the last year between November 26, 2012 and November 30, 2012, when shares rose for five straight days, increasing 1.4% (+69 cents) over that span. It saw one of its worst periods between August 17, 2012 and August 29, 2012 when shares fell for nine straight days, dropping 5.5% (-$2.81) over that span.

Key Stats:

With double-digit revenue growth the past four quarters, this earnings release is a chance to keep that positive trend going. The company has averaged year-over-year revenue growth of 13.8% over the last four quarters.

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 31.4% in the fourth quarter of the last fiscal year and 36% in the first quarter before increasing again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.65 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.61 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 10.6% to $2.51 billion while liabilities rose by 8.2% to $1.53 billion.

Analyst Ratings: With 14 analysts rating the stock a buy, none rating it a sell and four rating the stock a hold, there are indications of a bullish stance by analysts.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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