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Retail

Dollar General Misses Quarterly Estimates As Discretionary Spending Wanes

By Reuters
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Dollar General Misses Quarterly Estimates As Discretionary Spending Wanes

Dollar General Corp on Thursday missed market estimates for quarterly same-store sales as Americans curtailed discretionary spending amid stubbornly high inflation, and winter storm Elliott caused damage to its inventory.

The discount store chain, like many other US retailers, has seen a slowdown in demand for discretionary products such as houseware and apparel in favour of more need-based consumable goods.

In February, Dollar General forecast annual profit below expectations after cutting its earnings estimate for the holiday quarter on heavy discounts, higher costs and inventory damage due to winter storm Elliott, which hit several US states in December.

On Thursday, the company also reiterated its full-year same-store sales and profit forecasts.

The discount store chain's same-store sales rose 5.7% in the fourth quarter, compared with analysts' average estimate of about a 6% increase, according to Refinitiv IBES data.

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Read More: Dollar Stores Double Their Share In Rural Areas Of US: Study

Management Changes

In January, Dollar General Corp said its chief financial officer John Garratt plans to retire effective 2 June, adding that it will 'evaluate options' for its next finance chief.

Garratt's retirement comes at a time when retailers are facing a shift in consumer spending patterns, as penny-pinched Americans cut back on discretionary items and trade down to cheaper alternatives such as dollar stores for grocery needs.

The Tennessee-based retailer in July last year named Jeff Owen its chief executive, replacing Todd Vasos, who stepped down in November to take on an advisory role until April. Vasos is set to retire from the business after that.

News by Reuters, edited by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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