Dollar Stores Thrive In Pandemic, But Hold Back Forecasts
Dollar Stores Thrive In Pandemic, But Hold Back Forecasts
Dollar General Corp reported betterthanexpected quarterly results on Thursday, as the discount retailer benefited from higher demand for cheaper groceries and household items during the coronavirusinduced economic downturn.

Dollar General Corp reported better-than-expected quarterly results on Thursday, as the discount retailer benefited from higher demand for cheaper groceries and household items during the coronavirus-induced economic downturn.

High unemployment and falling household income this year due to the COVID-19 crisis have boosted demand for lower-priced cereals, vegetables and other essentials, lifting sales at dollar stores.

The strong demand also carried through to the current quarter, with Dollar General reporting same-store sales growth of about 14% for the period between Oct. 31 and Dec.1.

Still, the company did not provide a forecast for the rest of the year, like its peer Dollar Tree, citing the uncertainty caused by the pandemic.

Shares of Dollar General, which typically sells products for $10 or less, were down nearly 3% in premarket trading after having risen about 40% so far this year.

Dollar General has stores concentrated in rural locations, which makes them a one-stop place for customers – who have few other options nearby – to buy everything from home decor, party supplies to everyday essentials.

For the third quarter ended Oct. 30, Dollar General posted sales and same-store sales that beat analysts’ expectations as people bought more on average despite cutting down on the number of trips.

Net income rose to $574.26 million, or $2.31 per share, from $365.55 million, or $1.42 per share, a year earlier.

Analysts on average were expecting a profit of $2.00 per share, Refinitiv IBES data showed.

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