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Dollar General stock was tumbling after the company released disappointing earnings.
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Dollar General
stock was falling hard Thursday after the discount store retailer cut its sales and profit outlook for the year as its primary customer base gets hit by high inflation.
The stock (ticker: DG) was down 9.3% to $182.31 in premarket trading Thursday after falling 18% this year through Wednesday’s close.
The company’s first-quarter earnings of $2.34 per share were slightly shy of the $2.38 per share analysts expected. Revenue of $9.34 billion also narrowly missed estimates of $9.47 billion.
Dollar General said for the year ending January 2024 it expects earnings per share flat to approximately 8% decline versus the prior year. That’s considerably lower than its prior forecast of a 4% to 6% growth.
Same-store sales, a key metric for retailers representing sales at stores open for at least 13 months, are expected to increase by 1% to 2% versus its prior outlook of an increase of 3% to 3.5% in March. Analysts tracked by FactSet were looking for a 3.4% growth.
American shoppers, especially lower-income households, are pulling back on purchases. Consistently high prices and expectations of a recession are pressuring them as their excess savings have likely dwindled from the Federal Reserve’s estimated $350 billion late last year.
Dollar General CEO Jeff Owen said “the macroeconomic environment has been more challenging than expected, particularly for our core customer,” although, its confident in its ability to deliver strong growth in the years ahead.
Investors aren’t so sure.
Write to Karishma Vanjani at [email protected]
Source: https://www.barrons.com/articles/dollar-general-stock-price-earnings-9f0dfa2?siteid=yhoof2&yptr=yahoo