"Through theend of November we have opened 703 stores, exceedingour target, and we expect to have opened 710 stores bythe end of the year," said David Perdue, chairman &CEO. Currently, Dollar General has 7,340 neighborhoodstores across the nation.
Moreover, the company now has 10 Dollar General Marketstores open. The Dollar General Market is a largerformat store that offers an expanded selection ofDollar General's core mix of merchandise, including abroader selection of refrigerated food items and freshproduce. The new concept is expanding, and five more DGMarket stores will open by the end of the year andeight leases have been signed for an opening earlynext year. "We continue to be very encouraged by theresults of our Dollar General Market stores," Perduesays.
However, Perdue expressed disappointment with thecompany's financial performance during the thirdquarter. "First let me say that I am personally notsatisfied with our sales performance or our financialresults for the quarter," he says. "I am pleased,however, with our same store sales performance in thequarter relative to our competitors, especiallyconsidering the impact of the current economicenvironment on our core low-income consumer." Hepoints to high gasoline costs, unemployment andheating cost as having a negative impact on DollarGeneral consumers.
The company posted net income for the third quarter of$71.1 million, compared to $77.9 million for the sameperiod last year. However, results for third quarterof 2003 were favorably impacted by a $7.8 millionpre-tax non-recurring inventory adjustment.
Net sales during the third quarter of 2004 increased11.5% to $1.9 billion, compared to $1.7 billion in thesame period in 2003. The increase resulted primarilyfrom new store growth and a same-store sales increaseof 3.4%.
According to Perdue, the continued strain on DollarGeneral's core customer has compelled the retailer tonarrow its annual earnings expectation for 2004. Itnow expects net income for the year to be at the lowend of its original guidance, or between $341 millionand $350 million.
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