On Thursday, Dollar General (NYSE:DG) reduced its annual forecast for same-store sales as it anticipates customers will continue feeling the strain from persistently high inflation and pull back on discretionary spending.
The company, headquartered in Goodlettsville, Tennessee, has seen its shares fall about 36% this year, dropping by 14% in pre-market trading.
According to Refinitiv IBES data, analysts had, on average, expected a growth of 1.45%.
U.S. consumers, particularly those in lower and middle-income groups, have been feeling the squeeze as cuts in government aid and lower tax refunds compound inflationary pressures.
The company noted that gross profit as a percentage of net sales dropped 126 basis points in the second quarter compared to the previous year. This was driven by lower inventories, increased markdowns, and inventory damages.
The discount retailer now foresees same-store sales for the fiscal year 2023 to be in the range of a decline of 1% to growth of 1%, compared to its previous outlook of an increase of 1% to 2%. Analysts had, on average, anticipated a growth of 1.45% according to Refinitiv IBES data.
For the year, adjusted earnings per share are forecasted in the range of $7.10 to $8.30, marking a decline of 34% to 22% from the previously stable 8% decline.