Dollar General could introduce a fiscal 2025 guidance that may fall short of Wall Street's expectations due to a variety of macroeconomic and competitive challenges, according to analysts at Oppenheimer. This perspective was shared during their analysis on Tuesday, highlighting concerns surrounding the discount retailer's future performance. Oppenheimer has lowered its full-year earnings estimate for Dollar General to $5.50 per share from a previous estimate of $5.70.
This adjustment reflects a pessimistic outlook for the first three quarters of the fiscal year, especially as analysts from FactSet project Earnings Per Share (EPS) to reach $5.89. A lower guidance could signal complications such as difficult expense comparisons, ongoing wage pressures, and subpar same-store sales growth, which are all exacerbated by broader macroeconomic challenges and increased competition in the retail sector. Recently, shares of Dollar General experienced a dip, down 5.1% in midday trading, indicating decreased investor confidence.
The company is set to report its fiscal fourth-quarter results this Thursday, and Oppenheimer now anticipates an EPS of $1.43, a moderate increase from its earlier estimate of $1.25. However, the market consensus is slightly higher, with expectations set at $1.50. Notably, the stock price of Dollar General has declined following seven of its last eight earnings reports, reflecting a broader trend of negative investor sentiment towards the company and the dollar store sector in general.
Oppenheimer's analysts conveyed their cautiousness, stating, "From here, we are closely watching company efforts to drive a turnaround, which we believe thus far have been masked by both macro and competitive headwinds. We await new efforts to stabilize margins and drive a comp re-acceleration." Furthermore, last week, Deutsche Bank downgraded Dollar General’s stock from buy to hold, indicating that the retailer is facing increasing competitive and pricing challenges and that opportunities for revenue growth appear limited.
The current price of Dollar General’s stock stands at $78.12, reflecting a change of -4.68, or a percent change of -5.65..