Dollar General Rides Surging Growth To New Store Openings

The average American consumer may have developed a taste for high-tech gadgets delivered at blinding speeds for an unexpectedly low price, but there’s still part of that shopper that won’t let go of the thrill of buying something on the cheap.

Consumers’ enduring affinity for Dollar General is paying off big time for the low-price retailer. CEO Todd Vasos announced  Thursday (March 10) that Dollar General’s Q4 profits were up 5.6 percent, and same-store sales increased by 2.2 percent — both figures that outstripped average estimates. As a result, Dollar General shares edged up 7.3 percent to reach $80.70 per by the middle of the day.

“2015 was another great year for Dollar General as we achieved strong financial results with a focus on profitable sales growth,” Vasos said in a statement. “For the 26^th consecutive year, we delivered positive same-store sales growth. In the fourth quarter, we effectively balanced sales and operating profit through our toughest quarterly comparison of the year to deliver record results leading to full-year diluted EPS growth of 13 percent.”

When Vasos laid out his goals for the upcoming year — between 7 percent and 10 percent sales growth, 10 percent to 15 percent in per-share earnings and 2 percent to 4 percent consolidated sales increases — Credit Suisse analyst Azar Boehm noted that while they might seem overzealous, Dollar General beat its industry estimates for Q4, too.

“We view these goals as highly achievable regardless of the macro environment given the defensive growth nature of the story,” Boehm told The Wall Street Journal.

Interestingly, not all companies in the dollar retail space are thriving like Vasos and Dollar General. Fortune reported that rival Dollar Tree failed to meet its profit estimates, citing the economic climate for its troubles. Meanwhile, Dollar General is planning on buying back almost $1 billion in shares by the end of the year, quite the big financial splash for a dollar store, indeed.