Dollar General shares crater 25% as retailer cuts outlook, blaming ‘financially constrained’ customers
Dollar General shares tumbled Thursday after the discount retailer slashed its sales and profit guidance for the full year, suggesting its lower-income customers are struggling in this economy.
Shares of the retailer, which caters to more rural areas, tumbled 25% in premarket trading after the earnings report.
The company now expects fiscal 2024 same-store sales to be up 1.0% to 1.6%, lower than prior outlook for a 2% to 2.7% increase. Earnings per share for the year are expected to be in the range of just $5.50 to $6.20, versus the prior forecast of $6.80 to $7.55 per share.
“While we believe the softer sales trends are partially attributable to a core customer who feels financially constrained, we know the importance of controlling what we can control,” said CEO Todd Vasos in a statement.
More from CNBC
<a href="https://www.cnbc.com/2024/08/28/kickstarter-ceo-top-red-flag-employees-lack-of-self-awareness.html">CEO shares his No. 1 red flag in employees: People who aren’t self-aware ‘really struggle with this’</a>
<a href="https://www.cnbc.com/2024/08/29/nvidia-nvda-shares-fall-after-earnings-beat-estimates.html">Nvidia shares dip in premarket trade despite earnings beating estimates</a>
<a href="https://www.cnbc.com/2024/08/27/how-plant-seller-runs-low-stress-side-hustle-from-her-garage.html">44-year-old’s garage side hustle brings in $12,400 a month—it replaced her husband’s income</a>
Dollar General also reported disappointing numbers for the latest quarter. EPS of $1.70 per share came in below an LSEG estimate of $1.79 per share, while revenue of $10.21 billion was also lower than the analyst expectation of $10.37 billion.
Competitor Dollar Tree was falling in sympathy, off by more than 9% in premarket trading.