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Dollar General sees Q4 sales increase of 6.8%

BY Mike Troy

GOODLETTSVILLE, Tenn. — An unrelenting Dollar General continues to push forward with plans to open 700 stores this year despite reporting weak financial results and a 1.3% same-store sales increase for the fourth quarter.

Sales during Dollar General’s fourth quarter ended Dec. 31, increased 6.8% to nearly $4.5 billion and were driven mainly by the addition of new locations as same-store sales increased just 1.3%. The comp increase was due to growth in customer traffic and average transaction amount with tobacco and perishables singled out as key contributors, according to the company. However, growth in those categories negatively affected the company’s gross margins as did an increase in the shrink rate, which caused gross margins to decline to 31.9% from 32.5%. Expenses were essentially flat with the prior year at 20% of sales.

Profits in the fourth quarter increased 1.6% to $322 million or $1.01 a share, compared to a profit of $317 million, or 97 cents a share, in the fourth quarter the prior year.

“Sales in the fourth quarter were impacted by severe winter weather, including many days with significant store closures, an aggressive competitive retail landscape and our customers’ uncertainty about spending in the current economic environment,” Dollar General chairman and CEO Rick Dreiling said. “In spite of these headwinds, both customer traffic and average ticket increased in our same-stores in the fourth quarter. In addition, we controlled our expenses well and successfully managed the business to deliver a gross margin rate that was better than we anticipated. Although some of the severe weather impact has continued into the first quarter, we are pleased with our sales performance on days when weather is more normalized.”

The impact of weather can be seen in Dollar General’s expectation for a first quarter same-store sales increase in the range of 2% to 3%, compared to a 2.6% comp increase in the first quarter of 2013. For the full year, the company expects sales to increase in the range of 8% to 9% and same store sales to rise between 3% and 4%, which implies an acceleration of comp growth later in the year. Earnings per share are expected to range from $3.45 a share to $3.55.

The key contributor to those results will be the company’s breakneck pace of expansion which calls for 700 new stores as part of a $450 million to $500 million capital expenditure program. The new store construction program, the most ambitious in the retail industry, follows a record year of square footage expansion in 2013.

“Among our other many accomplishments for the year, we successfully opened 650 new stores, ending the year with 11,132 stores serving customers in 40 states,” Dreiling said. “Dollar General is a strong and growing business with high return store growth opportunities that we intend to capture. While we remain cautious on the current operating environment and the many challenges our customer is facing in 2014, we have a business model that generates significant cash flow, putting us in a position to invest in these growth opportunities, while continuing to return cash to shareholders through share repurchases.”

Dollar General will come close to surpassing $20 billion in annual sales this year if its same-store sales and expansion goals are realized. Last year, the company’s sales increased 9.2% to $17.5 billion from $16 billion and full-year same-store sales increased 3.3%. As in the fourth quarter, those results were driven by an increase in customer traffic and average transaction size and strength in categories such as tobacco, perishables, candy and snacks.

 

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Bayer HealthCare launches new flea and tick treatments

BY Ryan Chavis

ORLANDO, Fla. — Bayer HealthCare LLC Animal Health division on Wednesday launched eight flea and tick treatments and control solutions, which are to be sold at pet specialty retail stores. The announcement was made at Global Pet Expo, the pet industry’s largest annual trade show.

Four of the new products — Advantage Treatment Spray for dogs, Advantage Treatment Spray for cats, Advantage Treatment Shampoo for dogs and Advantage Treatment Shampoo for cats — aim to give pet owners an array of options for pest treatment.

Bayer’s new Advantage Household Spot and Crevice Spray, Advantage Carpet and Upholstery Spot Spray and Advantage Household Fogger kill indicated pests in the home, according to the company. Advantage Yard and Premise Spray kills pests in the yard and around the house.

"At Bayer, we know how much pet owners love their dogs and cats and that includes helping protect them against fleas and ticks," said Dave Van Brunt, VP, companion animal products marketing, Bayer HealthCare LLC Animal Health division, North America. "Bayer’s new flea and tick treatment and control products, coupled with Bayer’s existing product line, provide dog or cat owners with an integrated approach to treating pests on their pet and in their home and yard."

Bayer also introduced Bayer Pest Solution Center, a display in pet specialty retail stores that educates owners about pest prevention so they can choose the appropriate Bayer flea and tick product to meet the needs of their pets. Bayer also is supporting pet specialty retailers with training modules and toolkits for employees that will allow them to better help customers.

"Not all pet owners understand the importance of preventing pests on their dog or cat until they have a problem," said Paris Revoir, DVM, pet specialty national training manager, Bayer HealthCare LLC Animal Health division. "The Bayer Pest Solution Center organizes our full range of pet, home and yard products so that consumers can easily find the Bayer flea or tick solutions that best suit their needs."

 

 

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Study: Large waist linked to poor health, even among those with healthy BMI ranges

BY Antoinette Alexander

ROCHESTER, Minn.— Men and women with large waist circumferences — even those with a healthy body mass index — are more likely to die younger, and were more likely to die from such illnesses as heart disease, respiratory problems and cancer after accounting for BMI, smoking, alcohol use and physical activity, according to a study led by a Mayo Clinic researcher.

The study is published in the March edition of Mayo Clinic Proceedings.

The researchers pooled data from 11 different cohort studies, including more than 600,000 people from around the world. They found that men with waists 43 in. or greater in circumference had a 50% higher mortality risk than men with waists less than 35 in., and this translated to about a three-year lower life expectancy after age 40. Women with a waist circumference of 37 in. or greater had about an 80% higher mortality risk than women with a waist circumference of 27 in. or less, and this translated to about a five-year lower life expectancy after age 40.



Risk increased in a linear fashion such that for every 2 in. of greater circumference, mortality risk went up about 7% in men and about 9% in women.  Thus, there was not one natural “cutpoint” for waist circumference that could be used in the clinic, as risk increased across the spectrum of circumferences.



Another key finding was that elevated mortality risk with increasing waist circumference was observed at all levels of BMI, even among people who had normal BMI levels. Because of the large size of this pooled study, researchers were able to clearly show the independent contribution of waist circumference after accounting for BMI, stated James Cerhan, a Mayo Clinic epidemiologist and lead author of the study.

“BMI is not a perfect measure,” stated Cerhan. “It doesn’t discriminate lean mass from fat mass, and it also doesn’t say anything about where your weight is located. We worry about that because extra fat in your belly has a metabolic profile that is associated with diseases such as diabetes and heart disease.”


Cerhan stated that physicians should consider both BMI and waist circumference as part of risk assessment for obesity-related premature mortality.

“The primary goal should be preventing both a high BMI and a large waist circumference,” Cerhan added. “For those patients who have a large waist, trimming down even a few inches — through exercise and diet — could have important health benefits.”

This study was funded by the U.S. National Cancer Institute as part of the Cohort Consortium and included investigators from North American, Europe and Australia.

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