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Dollar Chains Report Surge In Sales On Coronavirus-Driven Demand

Published on May 28 2020 2:59 PM in Coronavirus tagged: Trending Posts / Dollar Tree / Dollar General / Quarterly Reports / COVID-19

Dollar Chains Report Surge In Sales On Coronavirus-Driven Demand

The top two US dollar store chains reported better-than-expected quarterly sales and profit, benefiting from a surge in demand for affordable groceries and household essentials amid the COVID-19 pandemic.

Designated as essential retailers, Dollar General Corp and Dollar Tree Inc were allowed to stay open while much of the United States remained shut under coronavirus lockdown measures, and the companies saw a rush in panic buying in late March and early April.

Rising unemployment and salary cuts have also led consumers look for cheaper alternatives for groceries and clothing they would otherwise buy at more expensive retailers.

Biggest Rise In Quarterly Sales For Dollar General

Dollar General, which reported its biggest rise in quarterly sales in at least 14 years, said demand in stores has remained elevated but has become more volatile in recent days.

Its net sales rose 27.6% to $8.45 billion (€7.7 billion) in the first quarter ended 1 May, beating analysts' estimates of $7.61 billion. It was the company's biggest jump in sales since at least February 2006, according to Refinitiv Eikon data.

Same-store sales jumped 21.7%.

Dollar Tree Sees Sales Rise

Separately, Dollar Tree Inc, which uses a larger portion of its shelf space for discretionary items like holiday cards and party supplies, was hurt by a lack of Easter shopping and said sales only rose 8.2% to $6.29 billion (€5.7 billion) in the first quarter.

Still, that was ahead of analysts' expectations of $6.14 billion (€5.6 billion), which sent Dollar Tree's share up over 7% before the opening bell.

Excluding certain items, Dollar General earned $2.56 per share, beating estimates of $1.74, while Dollar Tree reported a profit of $1.04 per share, compared to expectations of 85 cents.

Dollar General also said it expects to exceed its annual sales and profit forecasts and could resume its share buybacks as early as the second quarter.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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