Leading discount retailer, Dollar General Corporation DG has announced its intention to hire 10,000 workers by mid-October. The new hiring will not only fill the current vacancies but also support the company’s planned store expansion program. Following, the development the company’s shares gained nearly 1.5% on Sep 15, 2016.
The company further said that it will hire both part-time and full-time workers. The hiring also includes permanent positions like store managers, assistant store managers, lead sales associates as well as store associates. Notably, the company has hired nearly 42,000 employees since 2008.
Dollar General is accelerating its pace of new store openings. The company opened 700 new outlets and remodeled or relocated 915 stores during fiscal 2014. In fiscal 2015, the company inaugurated about 730 new stores, and relocated or remodeled about 881 stores.
The company plans to open about 900 new stores and relocate or remodel around 875 stores in fiscal 2016. During fiscal 2017, the company plans to open about 1,000 stores and remodel or relocate approximately 900 stores. The company is now focusing on smaller format stores as they require less capital expenditure and will help to cope with space constraint. Response from the company's DG 16 store format is encouraging.
However, the major concern for this Zacks Rank #4 (Sell) company in the past few years is the lower-than-expected sales. The company generated sales of $5,391.9 million in the second quarter of fiscal 2016 missing the Zacks Consensus Estimate of $5,491 million. This marked the 12th straight quarter of sales miss.
Comparable-store sales also came below management’s expectations on account of deflation in retail food price across perishable items, fall in both Supplemental Nutrition Assistance Program (SNAP) participation rates and benefit levels, unseasonably mild spring weather and stiff competition. Dollar General informed that price deflation and the reduction in SNAP benefits adversely impacted comparable-store sales by about 60 to 70 basis points.
Stocks to Consider
Better-ranked stocks worth considering in the sector include Big Lots Inc. BIG, Burlington Stores, Inc. BURL and Ross Stores Inc. ROST. All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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