Tennessee’s Dollar General forecasts tepid full-year profit as costs surge

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Tennessee’s Dollar General forecasts tepid full-year profit as costs surge

On Thursday, Dollar General, the Goodlettsville, Tennessee-headquartered American variety store chain having had 18,000 stores across the world’s largest economy as of October 2021, had forecasted its full-year sales and profits well below a Wall Street estimate, as the discount retailer appeared to be failing to weather a mounting supply chain crisis.

In point of fact, a flurry of macro-fundamentals including an upscaled volatility in freight costs, delay in shipping of goods alongside other supply chain disruptions had forced the American variety store chain to snarl its full-year profit forecast, while a soaring inflation had added to further holocaust on its profit margin amid a highly competitive year-end market landscape following a dour 2020.

Nevertheless, Dollar General had beaten analysts’ estimate for third quarter sales and profits that ended on October 29. If truth is to be spoken, a raft of US retailing industry behemoths but Walmart Inc and Target Corp, had forecasted full-year profits and sales well-below analysts estimates with Dollar General rival Dollar Tree Inc had projected holiday quarter profits below expectation last week.

Dollar General snarls 2021 sales growth forecast

According to Dollar General’s third-quarterly earnings’ report, the Tennessee-based variety store chain had forecasted its full-year sales to grow between 1.0 per cent and 1.5 per cent, however, the US retailer also had laid off a plan to start off up to 10 stores in Mexico by end-2022, marking off the American retailer’s first attempt to step outside the United States.

Besides, Dollar General had forecasted its full-year earnings to stay between $9.90 to $10.20 per share, well below an analysts’ estimate of $10.20 per share, IBES data from Refinitiv had unveiled. Nonetheless, over fiscal third quarter of 2021 that ended on October 29, Dollar General’s net sales rose to $8.52 billion compared to a $8.20 billion on a year-on-year basis, marginally beating a Wall Street estimate.

Dollar General Corp shares’ prices tumbled as much as 2.96 per cent in the day’s Wall Street closure to $216.02 apiece after souring as much as 3.47 per cent in pre-market trading.