US Markets
Thursday, August 29th, 2024 1:48 pm EDT
Key Points
- Reduced Sales and Profit Guidance: Dollar General slashed its sales and profit guidance for fiscal 2024, citing economic struggles among its lower-income customer base, with expected same-store sales growth now between 1.0% and 1.6%, down from the previous 2% to 2.7%.
- Significant Share Price Drop: Following the earnings report, Dollar General’s shares plummeted by 23%, reflecting investor concerns over the company’s lowered financial expectations.
- Disappointing Quarterly Results: The company reported lower-than-expected earnings per share (EPS) of $1.70 and revenue of $10.21 billion, both missing analyst estimates, which also led to a decline in competitor Dollar Tree’s shares by over 9%.
Dollar General shares experienced a significant drop of 23% after the discount retailer lowered its sales and profit guidance for the full fiscal year, highlighting the economic struggles faced by its lower-income customer base. The company, which primarily serves rural areas, adjusted its expectations for same-store sales growth in fiscal 2024 to a range of 1.0% to 1.6%, down from the previous forecast of 2% to 2.7%. Additionally, Dollar General revised its earnings per share (EPS) estimate to between $5.50 and $6.20, a notable decrease from the prior range of $6.80 to $7.55 per share.
CEO Todd Vasos acknowledged the challenges posed by a financially constrained core customer base, but emphasized the company’s commitment to managing factors within its control. The financial difficulties of Dollar General’s customers were reflected in the company’s quarterly performance, which also fell short of expectations. The reported EPS of $1.70 missed the LSEG estimate of $1.79, and the revenue of $10.21 billion was below the anticipated $10.37 billion.
The impact of Dollar General’s financial struggles extended to its competitor, Dollar Tree, which saw its shares fall by more than 9% in premarket trading. This suggests a broader concern within the discount retail sector, where companies that cater to price-sensitive consumers are feeling the effects of an economic environment that is putting additional pressure on their customers.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/08/29/dollar-general-shares-crater-20percent-as-retailer-cuts-outlook-blaming-financially-constrained-customers.html
