Fri. Mar 29th, 2024

Dollar General sinks 19% on a slashed profit outlook as company says its budget-sensitive customers are relying more on food banks and credit cards<!-- wp:html --><p class="copyright">Justin Sullivan/Getty Images</p> <p>Dollar General shares sharply fell Thursday as the retailer sliced its full-year financial outlook. <br /> Shares fell to their lowest in three years as the company missed first-quarter expectations. <br /> The company said customers are spending less on discretionary items and relying more on food banks. </p> <p> <a href="https://markets.businessinsider.com/stocks/dg-stock">Dollar General</a> shares plunged Thursday as the discount retailer's budget-sensitive customers are pulling back on spending, prompting the company to cut its financial outlooks. </p> <p>Shares dropped as much as 21% to touch an intraday low of $159.13, the weakest price since March 2020 as the COVID pandemic was unfolding. The stock pared the loss to 19% to close at $161.83. </p> <p>The company said its customers were continuing to shift more of their spending from discretionary items as the focus on basics such as food. Sales and earnings for its fiscal first quarter fell short of Wall Street's targets and the company sliced full-year projections. </p> <p>Smaller-than-expected tax refunds and reduced benefits for food stamps were cutting into how much shoppers could spend, the company said on a conference call. </p> <p>"[U]nfortunately, our customers are saying they're having to rely more on food banks, savings, credit cards. As we all know, credit card rates are at an all-time high," the company's CEO Jeffrey Owen said on the call, according to a transcript. </p> <p>Financial strain on shoppers is drawing them to seek more affordable items, including <a href="https://www.businessinsider.com/why-dollar-general-is-finally-feeling-slower-consumer-spending-2023-6">products at or below the $1 price point</a>, the retailer said.  </p> <p>Dollar General now expects full-year fiscal 2023 per-share earnings to flat to down 8% over last year. It previously expected growth of 4%-6%. For same-store sales, it anticipates 1%-2% growth versus its previous call of 3%-3.5%. </p> <p>First-quarter earnings were $2.34 a share on revenue of $9.34 billion, below the FactSet estimate of $2.38 a share and $9.47 billion in sales. </p> <div class="read-original">Read the original article on <a href="https://www.businessinsider.com/dollar-general-stock-earnings-spending-customers-pullback-outlook-sales-income-2023-6">Business Insider</a></div><!-- /wp:html -->

Dollar General shares sharply fell Thursday as the retailer sliced its full-year financial outlook. 
Shares fell to their lowest in three years as the company missed first-quarter expectations. 
The company said customers are spending less on discretionary items and relying more on food banks. 

 Dollar General shares plunged Thursday as the discount retailer’s budget-sensitive customers are pulling back on spending, prompting the company to cut its financial outlooks. 

Shares dropped as much as 21% to touch an intraday low of $159.13, the weakest price since March 2020 as the COVID pandemic was unfolding. The stock pared the loss to 19% to close at $161.83. 

The company said its customers were continuing to shift more of their spending from discretionary items as the focus on basics such as food. Sales and earnings for its fiscal first quarter fell short of Wall Street’s targets and the company sliced full-year projections. 

Smaller-than-expected tax refunds and reduced benefits for food stamps were cutting into how much shoppers could spend, the company said on a conference call. 

“[U]nfortunately, our customers are saying they’re having to rely more on food banks, savings, credit cards. As we all know, credit card rates are at an all-time high,” the company’s CEO Jeffrey Owen said on the call, according to a transcript. 

Financial strain on shoppers is drawing them to seek more affordable items, including products at or below the $1 price point, the retailer said.  

Dollar General now expects full-year fiscal 2023 per-share earnings to flat to down 8% over last year. It previously expected growth of 4%-6%. For same-store sales, it anticipates 1%-2% growth versus its previous call of 3%-3.5%. 

First-quarter earnings were $2.34 a share on revenue of $9.34 billion, below the FactSet estimate of $2.38 a share and $9.47 billion in sales. 

Read the original article on Business Insider

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