- Dollar General Corp
- 29 August 2024 12:40:37
Source: Sharecast
The US rural-focussed general store chain said cost-conscious shoppers were increasingly focusing on essential purchases such as groceries, at the expense of higher-margin products like home goods, electronics, toys, and apparel.
In response to the shift in consumer behaviour, Dollar General now projected same-store sales for the 2024 financial year to increase by just 1.0% to 1.6%, a significant reduction from its previous estimate of a 2.0% to 2.7% rise.
It also lowered its earnings per share forecast to a range of $5.50 to $6.20, down from the earlier projection of $6.80 to $7.55.
Despite a decrease in supply chain costs, Dollar General said its profit margins were still under pressure due to persistent high labour costs and increased markdowns and inventory damages.
For the second quarter, Dollar General said net sales were up 4.2% at $10.2bn, although same-store sales were only ahead 0.5%.
Its operating profit was down 20.6% at $550m, with diluted earnings per share sliding 20.2% to $1.70.
Year-to-date cash flow from operations totalled $1.7bn, as the company’s board declared a cash dividend of 59 US cents per share for the quarter.
At 0734 EDT (1234 BST), shares in Dollar General Corporation were down 23.34% in premarket trading in New York, at $94.94.
They had closed down 1.02% ahead of the results on Wednesday, at $123.84.
Reporting by Josh White for Sharecast.com.