Yahoo Finance Dollar General stock crashes 17% after the budget retailer cuts its outlook for the rest of the year
Dollar General stock tumbled 17% on Thursday following a second-quarter earnings miss.
The company reported earnings of $2.13 a share, while a FactSet survey forecasted $2.47 a share.
The budget retailer slashed its earnings and sales outlook for the rest of 2023.
Dollar General stock dropped roughly 17% Thursday following downbeat earnings for the second quarter and a revised outlook for the remainder of the year.
Shares changed hands at about $131.63 before midday in New York.
The budget retailer missed expectations with $2.13 earnings per share on revenue of $9.8 billion. A survey of FactSet analysts had forecasted $2.47 per share, with revenue of $9.9 billion.
"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, as well as reducing our inventory growth rate and further strengthening our price position," CEO Jeff Owen said in a statement.
Looking ahead, the company expects net sales growth to land in the range of 1.3%-3.3% for the fiscal year, down from the prior estimate of 3.3%-5%. The company also expects earnings to drop between a range of 34%-22% annually, revised from guidance of flat growth to an 8% drop.
Customer traffic, meanwhile won't turn positive until the fourth quarter, the company said.
"Our guidance assumes that the benefit of our actions and investments will grow as we move throughout the remainder of the year, which, along with lapping the winter storm impacts from 2022, should result in a greater overall sales benefit to the fourth quarter," Kelly Dilts, Dollar Tree's chief financial officer, said in a statement. "As a result, we expect fourth quarter to be significantly better than the third quarter from both the comp sales and EPS perspective."
The company also pointed to weaker sales trends and inventory pressures, including theft, as reasons for the guidance cuts, and said its customers were spending more on necessities like food rather than home goods, apparel, and seasonal purchases.
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