Dollar General 1Q13 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“It’s my belief that the best way to judge the health of a retailer for this quarter is based on the strength of his core business. For us, that would be our consumable business, and we delivered a strong same-store sales improvement in this category. However, our non-consumable or discretionary categories were soft during the quarter as sales of seasonal merchandise and apparel were impacted by the weather.”

“Although our consumable categories did pick up nicely in April, we did not see a similar recovery in our discretionary categories.”

“At the end of the first quarter, we had 10,662 stores in 40 states, well on our way to our next milestone of 11,000 stores.”

“as we look at tobacco purchases, we are seeing about 1/3 with tobacco only, and the remaining 2/3 are tobacco plus one or more items.”

“the non-consumable side of the business is going to need just a little bit of help from the economy, I believe…I had anticipated that the non-consumable side would accelerate at a faster pace as we move through April. And we didn’t see that, albeit we are seeing it improve as we are moving through May and June, but still not at the rate that I thought it would at this stage of the game.”

“much like a lot of the other major retailers out there, we have been looking down the road on this for 6 or 7 months. And our inventory on the non-consumable side is very healthy. It’s not like we have an issue there that’s going to sneak up on us.”

“there’s a lot more people who have an income under $50,000 a year than those that have an income of over $100,000. And…I actually feel better about the environment that our customer is in. We went through the Memorial Day weekend without a big spike in gasoline prices. I think that’s a very positive thing for us.”

“I would tell you, the warmer market that haven’t been impacted by the weather, our discretionary sales, particularly spring and summer, are just fine”

“Mark, there’s no doubt that store manager turnover and shrink, there is a direct correlation…And there’s also a direct correlation to store standards and customer service.”

“There is no evidence at this time that there’s a change with the trade-down customer or the trade-in customer…[when we did a survey] there was no indication from the higher demographic that if the economy got significantly better, that they were going to trade out of the channel…right now, the fastest-growing customer segment we still have is that customer that’s around $50,000 to $70,000 a year, which is above the income of our core customer.”