On November 22nd and December 1st respectively, Dollar General (DG) and Dollar Tree (DLTR) reported on their 3rd quarters of FY 2022 ending October 30th.
For the 3rd quarter Dollar General earned $526 million on sales of $9,464 million with a diluted EPS of $2.33. Revenue was 11.2 percent higher compared to the 3rd quarter of fiscal 2021. Net income was 8.0 percent higher with EPS up 12.0 percent. Gross margin for Q3 2022 fell 0.2 percent to 30.5 percent. Operating margin was unchanged at 7.8 percent. The Company posted assets of $29,007 million, of which $5,538 comprised intangibles against long-term debt and lease obligations of $15,418 million.
Dollar Tree earned $268 million on revenue of $6,937 million with a diluted EPS of $1.20. Compared with the 3rd quarter of fiscal 2021, revenue was up 8.1 percent, net income by 23.0 percent and diluted EPS was 25.0 percent higher. Operating margin increased from 4.8 percent in Q3 2021 nto 5.5 percent for the most recent quarter.The Company posted assets of $22,676 million, of which $5,084 comprised intangibles against long-term debt and lease obligations of $8,559 million.
In comparing financial performance of the Dollar stores during Q3, growth in same-store sales increased by 6.8 percent for Dollar General compared to an increase of 8.0 percent for Dollar Tree with a 4.1 percent increase for subsidiary Family Dollar.
Dollar General market capitalization on December 1st 2022 was $57,040 million compared to $32,400 million for Dollar Tree. Dollar General traded during the past fifty-two-weeks over a range of $183.25 to $262.21. Forward PE is 19.5. Dollar Tree has traded over fifty-two-weeks in a range of $123.62 to $177.19. Forward PE is 19.7.
The twelve-month trailing values reflecting management effectiveness were return on assets of 7.3 percent for Dollar General and 6.3 percent for Dollar Tree. The respective returns on equity were 37.6 percent for Dollar General compared to 20.3 percent for Dollar Tree. Dollar General achieved an operating margin of 8.8 percent compared to Dollar Tree at 8.1 percent. The respective profit margins were 6.6 percent for Dollar General and 5.8 percent for Dollar Tree.
Dollar General opened 268 new stores and remodeled 485 during the most recent quarter. The Company plans to open 1,050 new stores in 2023 with 2,000 remodels. By the end of the current year Dollar General will operate 18,500 stores with 11,000 equipped for self- check out payment. Dollar tree operates 16,292 stores in 48 U.S. states and in five Canadian provinces. Dollar General has introduced fresh produce in 700 stores and will expand this offering in response to customer requests and pressure from local authorities concerned over the quality of nutrition of residents in inner-city neighborhoods.
The category breakdown of sales for Dollar General (and presumably Dollar Tree) comprises consumables, (81%); Seasonal, (10%); Home products, (6%) and Apparel (3%).