(Reuters) -Dollar General on Thursday forecast annual sales and profit targets below estimates, joining a growing list of retailers that have signalled a grim year as still-high inflation and economic uncertainty dent consumer spending.
Retailers including Walmart, Target, Home Depot and Best Buy have raised caution about weak consumer spending in 2025 due to tariff uncertainty, as well as potential price hikes the levies would bring about.
Shares of Dollar General were, however, up about 5% in premarket trading, as the discount retailer beat estimates for holiday-quarter sales and profit. The stock has slumped nearly 70% over the last two years.
The company benefitted from improving its private-label brands selling everyday essentials, and remodelling its stores as part of a turnaround plan laid out by CEO Todd Vasos late in 2023.
For the holiday quarter, its comparable sales rose 1.2%, ahead of estimates of a 0.96% rise, according to data compiled by LSEG.
Sales in the consumables category, which makes up about 80% of Dollar General’s revenue, grew 5.3% in the quarter ended January 1, helping the company report a profit of $1.68 per share, topping estimates of $1.50.
The company expects annual same-store sales growth between 1.2% and 2.2%, compared with analysts’ average estimate of a 1.82% rise.
It also forecast fiscal 2025 profit per share of about $5.10 to $5.80, below analysts’ average estimate of $5.85.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Shinjini Ganguli)
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