Robust Q4 and FY18 guidance
DG reported a strong Q4 comp of +3.3%, comparing favourably to consensus (+2.6%) and the Family Dollar banner (part of DLTR, +1.0%). Gross margins expanded 43bps YoY (consensus -20bps), although this was offset by higher SG&A costs. EPS missed by $0.02 adjusting for store closures and a lower tax rate, but the quarter was a robust one nonetheless. FY18 was a key positive with comps targeted to be up +2.5% (consensus +2.3%), operating margins expected to be flat (in-line) and EPS forecast to be $6.05 at the mid-point (consensus $5.66), with a lower tax rate and higher buybacks the primary deltas to EPS expectations. Given the impact of reinvestment plans at other retailers, a strong FY18 guide.Dollar General is a discount retailer. The company's consumables products includes paper and cleaning products, packaged food, perishables, snacks, health and beauty, pet, and tobacco products. The company's seasonal products include decorations, toys, batteries, small electronics, greeting cards, stationery, prepaid phones and accessories, gardening supplies, hardware, automotive and home office supplies. The company's home products include kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, bed and bath soft goods. The company's apparel includes casual everyday apparel, as well as socks, underwear, disposable diapers, shoes and accessories.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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