Dollar General's fourth-quarter earnings fell short of Wall Street's expectations, yet the company's sales managed to exceed estimates. However, the discount retailer offered a full-year bottom-line outlook that falls below market projections. The company anticipates earnings per share to range between approximately $5.10 and $5.80 for fiscal 2025, while the current consensus on FactSet stands at $5.90.
Sales are projected to rise by about 3.4% to 4.4%. It's noteworthy that in the previous fiscal year, net income plummeted by 32% year over year to $5.11 billion, even as sales grew by 5% to reach $40.61 billion. For the current fiscal year, same-store sales are expected to increase between approximately 1.2% and 2.2%.
The Street, however, anticipates an increase of 1.8%. In fiscal 2024, same-store sales rose by 1.4%. The retailer reiterated its commitment to executing about 4,885 real estate projects in fiscal 2025, which includes plans to open around 575 new stores across the United States. During the three-month period ending January 31, Dollar General's net income tumbled by 52% year over year to $0.87 per share, which is significantly below the average analyst estimate on FactSet of $1.51.
This drop encompassed a rough headwind of around $0.81 per share resulting from the retailer's review of its store portfolio. In response, the company plans to shut down 96 company stores and 45 pOpshelf stores, among various other strategic initiatives, in the upcoming quarter. Chief Executive Todd Vasos commented, "We believe this review was appropriate to further strengthen the foundation of our business.
While the number of closings represents less than one percent of our overall store base, we believe this decision better positions us to serve our customers and communities." Sales for the reported quarter climbed to $10.3 billion, up from $9.86 billion during the previous year's quarter, surpassing the Street's estimate of $10.26 billion.
Same-store sales experienced a modest increase of 1.2%, exceeding the 0.9% figure anticipated by the market, bolstered by a 2.3% rise in average transactions, albeit partially offset by a 1.1% decrease in customer traffic. The consumables category saw an uptick in same-store sales, while home, seasonal, and apparel product categories reported declines, according to Dollar General. Following the earnings report, shares of Dollar General rose by 5% in the most recent premarket activity. Looking ahead to 2026, the retailer is targeting earnings per share growth exceeding 10% over the next five years.
The company also aims for sales growth between 3.5% and 4% starting this year over the same timeframe, as well as anticipating same-store sales growth of approximately 2% to 3% starting between 2025 and 2026. Chief Financial Officer Kelly Dilts stated, "We believe we are making the right investments and taking the appropriate actions to begin moving toward our updated long-term financial goals in the years ahead.
We are focused on driving sustainable long-term growth on both the top and bottom lines while creating long-term shareholder value.".