(Reuters) -Dollar General Corp on Thursday lowered its holiday-quarter profit forecast as heavy discounts and higher costs ate into margins.
The company also forecast full-year 2023 profit below Wall Street expectations, sending its shares down about 6% in premarket trading.
U.S. retailers’ profit margins have taken a hit as costs of freight, labor and other supply chain-related expenses have mounted, while excess inventory levels have also forced them to offer deep markdowns to spur demand.
The company said the forecast cut was mainly due to lower-than-anticipated sales and higher-than-anticipated inventory damages, both of which were hit by the winter storm Elliott in the quarter.
Dollar General said same-store sales increased 5.7% in the fourth quarter ended Feb. 3, missing its forecast of 6% to 7% growth.
The company now expects fourth-quarter earnings to be between $2.91 per share and $2.96 per share, compared to its prior forecast of $3.15 per share to $3.30 per share.
It expects profit to grow between 4% and 6% this financial year, less than the 10.6% growth analysts on average were expecting, according to Refinitiv data.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Savio D’Souza)
