Shares of the Goodlettsville, Tennessee-based company, down 45% so far this year, were up about 3% in premarket trading after the company also reaffirmed its full-year sales and profit forecasts.
Dollar General (NYSE:DG), which in October re-appointed former CEO Todd Vasos for a second stint, in a move to stabilize its struggling business, had trimmed its annual sales and profit forecasts for a third time.
Discount store operators in recent quarters have been struggling with a shift in shopper preferences for essentials over general merchandise, including home goods and apparel, as well as stiff competition from larger retailers such as Walmart (NYSE:WMT).
To counter this, Dollar General has been taking measures to keep prices low on its everyday staples, while offering discounts and promotions as it tries to clear excess stock.
Last week, rival Dollar Tree (NASDAQ:DLTR) trimmed its annual sales forecast on weaker spending from lower-income households.
Dollar General saw total merchandise inventories in the third quarter decline 1.8% year-on-year.
The company, however, saw its gross profit as a percentage of net sales fall 147 basis points for the quarter, as it grapples with a rise in retail shrink, where inventory is either lost, damaged or stolen.
The discount retailer’s same-store sales fell 1.3% for the third quarter, compared with analysts’ average estimate of a 2.08% drop, according to LSEG data.
It posted a per-share profit of $1.26 for the quarter, compared with LSEG estimates of $1.19.
Source: Economy - investing.com
