Dollar General Corp’s (DG) fourth-quarter same-store sales and profit, reported on Thursday, fell short of market expectations, since the company grappled with rising costs and lower customer traffic at its more than 18,700 stores.
According to the store chain, regardless of a “modest decrease in customer traffic” during the latest quarter, the average transaction amount has increased.
Yet, there has been a slowdown in demand for higher-margin discretionary items such as houseware or apparel, as customers focused more on first necessity goods amid persistently high inflation.
Comparable sales went up 5.7% year-on-year in the fiscal fourth quarter, while falling short of market consensus of a 6% growth, as the company experienced inventory damages inflicted by Elliott winter storm system.
Excluding special items, Dollar General earned $2.96 per share in the quarter ended February 3rd, again missing median analyst estimate of $2.97 per share.
The company said earlier this week it planned to invest nearly $100 million in its store network, mostly in incremental labor hours, in order to improve store standards.
The shares of Dollar General Corporation closed 2.96% ($6.47) lower at $212.09 in New York on Thursday, with the discount store chain’s total market cap now standing at $47.418 billion.
The shares of Dollar General Corporation went up 4.42% in 2022, compared with a 19.44% loss for the benchmark index, S&P 500 (SPX).
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