Business
Dollar General Ups Sales Forecast as Inflation-hit Americans Spend
(CTN News) – The Dollar General Corp (DG.N) raised its annual comparable sales forecast on Thursday, citing Americans buying groceries and household items at discount stores.
The shares of Dollar General were up about 3% in pre-market trading after the company exceeded Wall Street expectations for its second-quarter results and boosted its share buyback program by $2 billion as a result.
During economic turmoil, such as the COVID-19 pandemic and the 2008 financial crisis, cash-strapped consumers seek cheaper alternatives in order to relieve their wallet burdens.
Opening new stores and doubling down on fresh produce and frozen food offerings helped Dollar General drive traffic higher in the quarter by cashing in on the surge in demand.
In spite of decades of high dollar inflation, affluent shoppers are still looking for bargains at discount outlets in spite of decades of high inflation. In a recent statement, Walmart Inc (WMT.N) stated that its low-priced food and consumable products were helping to attract more middle- and higher-income customers.
As a result, dollar the company’s gross margins improved to 32.3% from 31.6% a year earlier despite a slower demand for discretionary items, such as apparel, home supplies, and seasonal items, by a year.
As compared with its previous forecast, the retailer now expects same-store sales to rise 4% to 4.5% in fiscal 2022.
It has been reported that Dollar General’s same-store sales rose 4.6% in the second quarter, beating analysts’ estimates according to Refinitiv IBES data.
The company’s earnings per share were higher than expected at $2.98.
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