Dollar General on Thursday cut its full-year sales and profit forecasts, hurt by declining store traffic and the discount retailer’s push to sell more low-margin essentials than on-demand products.
The Goodlettsville, Tennessee-based company is down about 36 percent this year, after a 14 percent premarket decline.
American consumers, especially lower- to middle-income groups, are feeling the pinch as government funding cuts and tax refunds exacerbate inflation.
The company said gross profit as a percentage of net sales was down 126 basis points from last year’s second quarter, driven by lower inventory and depreciation and impairment of assets.
The discount retailer expects same-store sales to grow 1% to 1% in fiscal 2023 from the current rate of 1%. According to Refinitiv IBES data, analysts on average were expecting growth of 1.45%.
For the year, adjusted earnings per share are forecast to be between $7.10 and $8.30, or a decline of 34% to 22%, versus a flat-to-8% decline from the previous outlook. (Reporting by Savyatha Mishra in Bengaluru; Editing by Pooja Desai)