Dollar General said a December storm kept it from meeting its expected financial results.
The retailer said in a Thursday (Feb. 23) press release that its same-store sales increased 5.7% in the fourth quarter, below its previous expectation of 6% to 7%, and increased 4.3% for the fiscal year ended Feb. 3, compared to the previous expectation that it would be toward the upper end of 4.0% to 4.5%.
These preliminary results were released ahead of Dollar General’s March 16 release of the full results.
In pre-market trading Thursday, Dollar General’s stock was down about 3.4% and competitor Dollar Tree’s was down 1.0%.
Dollar Tree will hold its fourth-quarter earnings call Wednesday (March 1).
“The company believes the lower-than-expected results are primarily attributable to lower-than-anticipated sales and higher-than-anticipated inventory damages, both of which were negatively impacted, to varying degrees, by Winter Storm Elliott during the fourth quarter,” Dollar General said in the press release.
The company noted that its same-store sales for November and January were within its expected guidance range, while those for December were not. Winter Storm Elliott took place December 21 to 26 and was described by the National Weather Service Weather Prediction Center as a “historic arctic outbreak.”
The winter storm swept the country during the 2022 holiday season, and its impact included causing Southwest Airlines to cancel over 15,000 flights.
Looking ahead, Dollar General said in the press release that it expects same-store sales growth in the range of 3.0% to 3.5% for the current fiscal year that ends Feb. 2, 2024.
This announcement came a day after off-price retailer The TJX Companies reported that its U.S. comparable store sales were flat in fiscal year 2023 but up 4% in the fourth quarter, which ended Jan. 28.
TJX said comp store sales at its home products businesses were down 7% but those at its apparel businesses were up 7%.
Dollar General’s announcement of lower-than-expected results comes about three months after the retailer said in a Dec. 1 earnings release that its same store sales increased 6.8% year over year during the quarter ended Oct. 28.
At the same time, the company gave a cautious Q4 earnings guidance in the face of a challenging macroeconomic environment, cost pressure and supply chain difficulties.
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