Dollar General Corp., already on track for its first annual share decline, fell again after cutting its profit forecast for the second straight quarter amid rising labor costs and “softer sales trends.”
(Bloomberg) — Dollar General Corp., already on track for its first annual share decline, fell again after cutting its profit forecast for the second straight quarter amid rising labor costs and “softer sales trends.”
Earnings will tumble as much as 34% on a per-share basis during the current fiscal year, the discount retailer said in a statement Thursday as it reported financial results. Dollar General had previously said the measure wouldn’t fall more than 8%. Wall Street had been projecting about a 6% drop.
The dramatically reduced outlook deepens the pain for Dollar General, which has been reeling this year from pressure on its lower-income customers and stepped-up competition from the likes of Dollar Tree Inc. and Walmart Inc. In the latest quarter, Dollar General’s comparable sales fell slightly as the company marked down some merchandise after inventory surged earlier this year.
“While we are not satisfied with our overall financial results, we made significant progress in the second quarter improving execution in our supply chain and our stores,” Chief Executive Officer Jeff Owen said in the statement.
Dollar General tumbled 14% ahead of regular trading in New York. The shares fell 36% this year through Wednesday, the largest decline on an S&P index of consumer-staples companies.
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