Dollar General Corp. (NYSE:DG) shares dropped sharply in price on the release Thursday of quarterly earnings.
Net sales increased 17.6% to $8.4 billion in the fourth quarter of 2020 compared to $7.2 billion in the fourth quarter of 2019. The net sales increase included positive sales contributions from new stores and growth in same-store sales, modestly offset by the impact of store closures.
Same-store sales increased 12.7% compared to the fourth quarter of 2019, driven by an increase in average transaction amount, partially offset by a decline in customer traffic.
Same-store sales increased in each of the consumables, seasonal, home products and apparel categories, with the largest percentage increase in the home products category. The Company believes consumer behavior driven by COVID-19 had a significant positive effect on net sales and same-store sales.
Operating profit for the fourth quarter of 2020 increased 21.0% to $872.2 million compared to $720.9 million in the fourth quarter of 2019. The fourth quarter of 2020 included approximately $96 million of incremental investments the Company made in response to the COVID-19 pandemic. These investments included approximately $69 million in appreciation bonuses for eligible frontline employees, and measures taken to further protect the health and safety of employees and customers.
CEO Todd Vasos said, "We are pleased with our strong finish to fiscal 2020, and I thank all of our associates for their extraordinary efforts over the past year to support our customers, our communities and each other.
"Despite a challenging operating environment, our team members have remained steadfast in their dedication to fulfilling our mission of Serving Others, resulting in exceptional fourth-quarter and full-year financial results."
DG shares staggered $9.46, or 5.1%, to $178.05.
