On Thursday, Dollar General forecasted weaker full-year sales growth, indicating that low-income and price-sensitive consumers are becoming more cautious against the backdrop of rising economic uncertainty and high living costs. This led to the company's stock dropping about 7% in early trading.
The company expects same-store sales growth of 2.2% to 2.7% for the 2026 fiscal year, slightly below analysts' expectations of 2.48%. The full-year earnings per share guidance is between $7.10 and $7.35, which aligns with the market expectation of $7.21, reflecting the company's cautious outlook on the consumption environment and cost inflation.
The earnings report itself was not weak. Fourth-quarter same-store sales grew by 4.3%, which is above the market expectation of 3.34%. Earnings per share for the quarter ending January 30 were $1.93, significantly higher than the expected $1.65.
Management stated that a severe winter storm in early February temporarily closed some stores, affecting early-year sales performance. Meanwhile, the company noted that consumer spending on discretionary items remains restrained.
