Why Dollar General Stock Dropped Today
Shares of Dollar General (NYSE: DG) rose early in Thursday's trading session, but then dropped fairly sharply. As of 12:52 p.m. ET, the discount retailer's stock was down by about 4.9% as the market digested the company's lackluster guidance for the coming year.
In its fiscal 2023 (which ended on Feb. 2), Dollar General grew net sales by 2% to almost $39 billion. The top line was boosted by modest same-store sales growth of 0.2%, a notable drop-off from its same-store sales growth of 4.3% in fiscal 2022. The company's sales surged early in the COVID-19 pandemic, but have mostly plateaued since.
It seems as though Dollar General's management expected sales to continue to surge, which resulted in the company holding too much inventory. Those overstocked shelves have led to lower profits. Its full-year net income was $1.7 billion compared to $2.4 billion in fiscal 2022.
Source Fool.com
