Dollar General Boosts Outlook as Value Pitch Draws Shoppers
Core Consumer Is Shopping More Frequently While Buying Fewer Items Per Visit
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Dollar General Corp. raised its full-year outlook, showing how value-focused retailers are winning over consumers hunting for deals.
Earnings this year will be $6.30 to $6.50 a share, up from no more than $6.30 in its previous forecast, the company said Dec. 4. The retailer also reported a profit of $1.28 a share in its most-recent quarter, topping analyst estimates.
share gains in both its consumable and non-consumable categories, with growth in seasonal goods, home products and apparel. The company’s core consumer is shopping more frequently while purchasing fewer items per visit — an indication that they’re financially pressured, CEO Todd Vasos said on a call with analysts.
Dollar General is also seeing more high-income shoppers looking to save, much like its competitor Dollar Tree Inc.
Dollar General ranks No. 21 on theTransport Topics Top 100 list of the largest private carriersin North America and No. 3 on TT’swholesale/retail carriers sector list.
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The shares rose as much as 11% in New York trading Dec. 4, reaching the highest level intraday in more than a year. The stock had gained 45% this year through the Dec. 3 close, better than the S&P 500 Index’s 16% advance.
Dollar General has focused in recent quarters on getting the retail basics right, such as providing clean stores with sufficient inventory and staffing levels. That’s helped to keep up the company’s performance, along with its low prices. Dollar General’s selection of grocery products are also less susceptible to tariffs.
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The efforts appear to be gaining traction with both lower-income shoppers and wealthier consumers, “though whether those new customers will stick remains to be seen,” Bloomberg Intelligence analyst Jennifer Bartashus said in a research note.
Dollar Tree also raised its full-year profit outlook andreportedresults that beat expectations in the most recent quarter. Other value-focued retailers, including Ross Stores Inc. and TJX Cos. have recently reported better-than-expected results.
