As A Result Of A Storm-Ravaged Quarter, Dollar General's 2023 Profit Forecast Disappoints

Dollar General Inc. lowered its earnings prediction for the crucial holiday quarter on Thursday due to steep discounts, higher prices, and inventory damage from winter storm Elliott, and as a result, forecasted full-year profit that was much below forecasts.

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In premarket trading, shares of Dollar General decreased by 6%.

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Profits for the company's fiscal year 2023 are expected to increase by 4% to 6%. Refinitiv IBES data show that analysts anticipated a gain of 10.6% on average.

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Retailers are growing more apprehensive about their outlooks for the year as U.S. consumer prices, rental housing costs, and food costs continue to rise.

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This week, Walmart Inc. and Home Depot Inc. also lowered their annual earnings projections.

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In contrast to its previous projection of a 6% to 7% gain, Dollar General reported that same-store sales grew 5.7% in the fourth quarter ended Feb. 3.

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In contrast to a previous projection of $3.15 to $3.30, the business now anticipates earnings per share to be between $2.91 and $2.96.

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US businesses are fighting rising freight, labor, and other supply-chain-related costs while simultaneously slashing prices drastically to get rid of excess inventory.

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The grocery and food industries at Dollar General are also up against fierce competition from large rivals like Walmart, which generates 56% of its revenue from groceries, and Kroger Co.

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The corporation also attributed the reduction to winter storm Elliott's lower sales and higher inventory losses.

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The center of the United States was battered by the winter storm in December, which dumped heavy snow and freezing rain on the Northern Plains and wreaked havoc with tornadoes in Louisiana, Oklahoma, and Texas.

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On March 16, Dollar General is anticipated to release its financial results for the three months ended February 3.