Discount retailer Dollar General has reported an 8.2% increase in fourth-quarter net profit, despite slowing apparel sales.
Net income reached $317 million for the 13 weeks to February 1, compared to $293 million the same period last year.
Net sales edged up 0.5% to $4.21 billion from $4.19 billion the prior year, driven from increases in customer traffic and average transaction amount. Same-store sales climbed 3%.
Apparel sales, however, declined 1.9% to $236.8 million from $241.4 million last year.
Gross margin improved 34 basis points to 32.5% against 32.2%. The company said it was boosted by a significant reduction in the adjustment to its last in first out reserve as well as improved transportation efficiencies and higher markups.
Over the full year, net income jumped 24.3% to $953 million, from $767 million last year. Sales rose 8.2% to $16.02 billion from $14.81 billion the previous year, while same-store sales were up 4.7%
“Dollar General had yet another outstanding year in 2012 including exceptionally strong fourth quarter results. We grew our market share and invested strategically to continue to win with our customers. These results demonstrate the strength of our business strategy, and we believe we are very well-positioned for future growth,” said chairman and CEO Rick Dreiling.
Looking ahead, Dollar General expects adjusted earnings per share for 2013 to range from $3.15 to $3.30, up from the $2.91 recorded in 2012. Total sales and same store sales are set to increase 10-12% and 4-6% respectively.
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