Dollar General Stock Plunges on Weaker-Than-Expected Earnings, Outlook

Dollar General (DG) shares tumbled Thursday morning after the discount retailer reported weaker-than-expected earnings for the second quarter lowered its projections for full-year revenue.

Dollar General reported $10.21 billion in revenue for the second quarter, up 4% from the same time last year but below analysts’ estimates as same store sales rose just 0.5%. Dollar General also missed profit projections compiled by Visible Alpha, with net income down 20% year-over-year at $374.19 million.

Taking Action to Improve Value, Convenience

Dollar General CEO Todd Vasos said the company believes the “softer sales trends” it’s experiencing can be partially explained by a “core customer who feels financially constrained.” He said the company is taking “decisive action” to improve Dollar General’s value and convenience for customers.

The company lowered its outlook for the full fiscal year, projecting revenue growth of between 4.7% to 5.3%, down from a previous range of 6% to 6.7%, while same-store sales are expected to grow 1% to 1.6%, down from 2% to 2.7% previously.

The retailer said it anticipates full-year earnings per share (EPS) of $5.50 to $6.20, down from the previous range of $6.80 to $7.55. The new range is below analyst estimates of $7.12 and the $7.55 per share Dollar General reported for fiscal 2023.

Dollar General shares were down 28% to $89.01 in Thursday morning trading, and have lost over one-third of their value since the start of the year.