Dollar General cuts annual forecasts on
weaker discretionary demand; shares down 15%
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[August 29, 2024]
(Reuters) -Discount retailer Dollar General cut forecast for
annual same-store sales and profit on Thursday, as cost-conscious
customers cut back spending on its higher-margin goods to prioritize
essential purchases.
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A person exits a Dollar General store in Mount Rainier, Maryland, U.S.,
June 1, 2021. REUTERS/Erin Scott/File Photo |
Shares of the company plunged about 15% in premarket trading.
Discount store operators have seen sluggish demand for
higher-priced categories such as home goods, electronics, toys
and apparel as customers focus on shopping for essentials such
as groceries.
Despite supply chain costs coming down from its peaks, Dollar
General's margins continued to be pressured by still-high labor
costs, as well as increased markdowns and inventory damages.
The company expects fiscal 2024 same-store sales to be up 1.0%
to 1.6%, compared with prior forecast of 2% to 2.7% rise.
It also expects annual earnings per share in the range of$5.50
to $6.20, compared with prior forecast of $6.80 to $7.55 per
share.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Vijay
Kishore)
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