Dollar General Profits Suffer

GOODLETTSVILLE, Tenn. -- Dollar General here said Monday that an ongoing inventory and real estate restructuring brought profits down by 66% in the fiscal fourth quarter and contributed to an annual earnings decline of 60.6%. A plan to abandon its traditional “packaway” inventory strategy with closeout sales helped increase sales by 3% to $2.6 billion for the quarter, but profits fell to $50.1 million, and profit as a percentage of sales fell from 29.5% to 25.3%, Dollar General said. The retailer earlier this month announced plans to be acquired and taken private by buyout firm Kohlberg Kravis Roberts. Sales for the fiscal year improved 6.8% to $9.2 billion. Annual earnings were $137.9 million, down from $350.2 million in the 53-week 2005 fiscal year.