Key Factors to Watch Ahead of Dollar General's Q4 Earnings Report

Dollar General Corporation DG is likely to register an increase in the top line when it reports fourth-quarter fiscal 2024 results on March 13 before the opening bell. The Zacks Consensus Estimate suggests that the company will achieve revenues of $10.26 billion, marking a 4.1% increase compared to the same quarter last year. Despite the expected rise in revenues, Dollar General's bottom line is likely to have faced challenges. The Zacks Consensus Estimate for earnings per share for the fourth quarter has slid by a penny to $1.49 over the past seven days. This figure indicates a decline of 18.6% from earnings reported in the year-ago period.Dollar General has a trailing four-quarter negative earnings surprise of 0.5%, on average. In the last reported quarter, the company’s bottom line missed the Zacks Consensus Estimate by a margin of 7.3%.See the Zacks Earnings Calendar to stay ahead of market-making news.Factors to Note Ahead of DG’s Q4 EarningsDollar General's strategic focus on expanding its market share, particularly in the consumable product category, highlights its competitive pricing and strong value proposition, which resonate well with budget-conscious consumers. The company's proactive pricing strategies and promotional efforts, alongside the ongoing expansion of private brands, are expected to have a positive impact on its revenue growth.We are optimistic about several key initiatives, including DG Fresh, SKU rationalization, digitization and the expansion of the private fleet, all of which are likely to have driven improvements in same-store sales. We forecast 1% growth in same-store sales for the to-be-reported quarter.The same-day delivery pilot program is expected to have driven incremental sales by providing additional convenience for shoppers. Furthermore, the company’s partnership with DoorDash is likely to have helped capture digital sales. These factors, combined with increased foot traffic during the holiday season, are expected to have boosted revenues in the quarter.However, Dollar General faces challenges such as markdown pressures, rising SG&A expenses and potential shifts in consumer spending patterns. These factors highlight the dynamic environment in which the company operates. We expect the gross margin to decline by 20 basis points in the fourth quarter. Furthermore, inflationary pressures on operating costs, including higher wages and logistics expenses, are compressing margins. We expect SG&A expenses, as a percentage of net sales, to deleverage 80 basis points. As a result, we foresee an operating margin contraction of 100 basis points.Dollar General Corporation Price, Consensus and EPS Surprise Dollar General Corporation price-consensus-eps-surprise-chart | Dollar General Corporation QuoteWhat the Zacks Model Predicts for DGAs investors prepare for Dollar General's fourth-quarter announcement, the question looms regarding earnings beat or miss. Our proven model predicts that an earnings beat is likely for Dollar General this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.Dollar General has an Earnings ESP of +1.08% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Other Stocks With the Favorable CombinationHere are other companies you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:American Eagle Outfitters AEO has an Earnings ESP of +2.29% and a Zacks Rank of 3 at present. AEO’s top line is anticipated to advance year over year when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.61 billion, which suggests a 4.3% decline from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.The company is expected to register a decrease in the bottom line. The consensus estimate for AEO’s fourth-quarter earnings is pegged at 50 cents per share, down 18% from the year-ago quarter. AEO has a trailing four-quarter earnings surprise of 12.6%, on average.The Gap GAP currently has an Earnings ESP of +0.69% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports first-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for the quarterly earnings per share is pegged at 42 cents, which suggests a 2.4% rise from the figure reported in the year-ago quarter. The Gap's top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.43 billion, which suggests a rise of 1.2% from the prior-year quarter. GAP has a trailing four-quarter earnings surprise of 77.5%, on average.Five Below FIVE has an Earnings ESP of +1.45% and currently carries a Zacks Rank of 3. FIVE’s top line is anticipated to advance year over year when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.38 billion, which suggests a 3.1% rise from the figure reported in the year-ago quarter.The company is expected to register a decline in the bottom line. The consensus estimate for Five Below’s fourth-quarter earnings is pegged at $3.35 per share, down 8.2% from the year-ago quarter. FIVE has a trailing four-quarter earnings surprise of 39%, on average.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dollar General Corporation (DG): Free Stock Analysis Report American Eagle Outfitters, Inc. (AEO): Free Stock Analysis Report The Gap, Inc. (GAP): Free Stock Analysis Report Five Below, Inc. (FIVE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks