Deep discounters Dollar General, Family Dollar and Five Below collectively opened 683 new stores in the second quarter and pulled in $13.1 billion in sales.
Below, we look at the dollar stores' performance over Q2.
Net Sales: $7 billion | YoY: +8.4%
Operating income: $577.8 million | YoY: +5.9%
Net income: $426.6 million | YoY: +4.7%
Net stores opened: 466
Highlights: Dollar General CEO Todd Vasos said in a statement that the retailer's top- and bottom-line growth were driven by execution on category management, merchandise "innovation," store operations, cost control and progress on the discounter's strategic initiatives. Growth in sales of the consumables, seasonal and home categories pushed up Dollar General's comps, though that growth was partially offset by a decline in comparable apparel sales, the company said.
Profits were up despite $31 million related to what the company described as "significant legal expenses" around wage, hour and consumer litigation.
Neil Saunders, managing director of GlobalData Retail, said in emailed comments that "improvements to displays, a reasonable selection of national brands, and the development of smart own brands like Believe Beauty cosmetics is also helping to convert more higher-income shoppers, thereby increasing basket sizes." He noted that the decline in apparel sales was partly planned, as Dollar General reduced store space for the category.
Dollar General on Thursday also announced key executive appointments, including the promotion of Jeffery Owen to chief operating officer overseeing store operations, merchandising and supply chain. The retailer also named current senior vice president of store operations Steven Sunderland to succeed Owen as executive vice president of store operations.
Net Sales: $5.7 billion | +3.9%
Operating income: $268.9 million | -29.7%
Net income: $180.3 million | -34.2%
Net stores opened: -155*
*The company said it opened 107 Dollar Tree stores and 43 Family Dollars, while closing 296 Family Dollar stores and nine Dollar Tree locations. The figure does not include the six re-bannered stores.
Highlights: Dollar Tree CEO and President Gary Philbin said in a statement that Family Dollar's turnaround "continues to gain momentum," citing the retailer's comps increase of 2.4%. At Dollar Tree, comps increased by the same amount, despite a helium shortage that knocked 40 basis points off comps.
The retailer closed hundreds of stores as part of a portfolio optimization effort. Along with the closures, the company re-bannered 100 Family Dollars as Dollar Tree stores. By the end of the quarter, both banners covered some 119.7 million square feet of retail space.
Operating and corporate expenses during the quarter increased due to consolidation of the company's store support centers, asset write-offs for closed stores, and payroll costs from higher average hourly rates and store initiatives.
Net Sales: $417.4 million | YoY: +20%
Operating income: $36 million | +18.4%
Net income: $28.8 million | +15%
Stores opened: 44*
*The company does not disclose stores closed in its earnings release.
Highlights: Five Below CEO and President Joel Anderson said the retailer was on pace to open 150 new stores this year. Driving the performance in Q2 were strong contributions at some of the company's newest stores, he said.
Anderson added that Five Below headed into Q3 "with a back to school assortment that is resonating with customers." Along with merchandise, Five Below is focused on remodelings and a refresh of its store format, including "a new, reimagined front-end experience" in addition to its test of Ten Below, a section that includes higher-priced items at $10 or less.