Get the app today! Download iPhone App Download Android App

Dollar General Warns Of Dropping Sales As Pandemic Boom Peters Out

Published on Mar 18 2021 12:29 PM in Retail tagged: Dollar General / outlook / Quarterly Reports / Pandemic

Dollar General Warns Of Dropping Sales As Pandemic Boom Peters Out

Dollar General Corp forecast annual sales and profit below estimates, indicating the roll out of vaccines and a reopening economy would lead to a bigger-than-expected slowdown from a pandemic-fuelled rush for discounted groceries.

The company's shares, which have gained nearly 22% over the last year, fell 4.5% before the bell.

The promise of a return to relative normalcy later this year as more Americans get inoculated against COVID-19 has made the boom in pantry stocking, which made Dollar General one of the bigger retail beneficiaries of the health crisis, unlikely to be repeated.

Outlook

Analysts expect sales at discount stores to drop in the later half of the year after new stimulus money, on the way to mostly lower- and middle-income households, has dried up.

Dollar General said it expects full-year same-store sales to fall 4% to 6%, compared with analysts' estimate of a 1.2% decline, according to IBES data from Refinitiv. Overall net sales are expected to be flat to 2% lower, compared with estimates of a 1.4% increase.

'Significant uncertainty continues to exist regarding the severity and duration of the COVID-19 pandemic, including its impact on the US economy, consumer behaviour and the company's business,' Dollar General said in a statement.

The company forecast annual earnings per share of $8.80 to $9.50, below estimates of $10.08.

Quarterly Performance

Same-store sales in the fourth quarter ended 29 January rose 12.7%, beating analysts' estimate of a 10.7% increase, helped by the $600 stimulus checks that boosted spending in January.

Net income rose about 20% to $642.7 million, or $2.62 per share, but missed estimates of $2.72 per share.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

Share on Facebook Share on Twitter Share on LinkedIn Share via Email