The Buzz

All markets and investing news all the time

Dollar General: Investors not buying

December 11, 2012: 11:55 AM ET

Anyone spare a dollar?

Dollar General (DG) is having a rough day after reporting decent earnings but less-than-stellar guidance. Shares slumped nearly 5% Tuesday.

The discount retailer beat earnings-per-share estimates by 3 cents but that's where the good news ends. Revenue was just in line with forecasts, and Dollar General's outlook left investors with little to cheer about.

"Although our performance over the Thanksgiving weekend and start of the holiday season has been encouraging, we continue to be cautious for the remainder of the year," said CEO Rick Dreiling, in a statement.

With consumers already on edge over the U.S. economy, what with the fiscal cliff and all, it's no wonder Dollar General isn't feeling the love from StockTwits traders.

AK_Michigan
$DG beats earnings but poor guidance go figure

BrianSozzi
dollar general basically said it has no pricing power and it's not really confident in its guidance.. $DG $$

It can't come as a complete surprise that guidance wasn't all that great. Consider that lawmakers in Washington can't get their act together and the job market is still in the delicate stages of a recovery, so discount or not, consumers aren't rushing out to spend money they don't have.

Head-scratching. Dollar General beat by 3¢, lifted comp outlook but CUT its operating profit outlook on softer selling margin $DG $FDO $DLTR

They still expect same-store sales to increase by healthy 3% to 4% in the fourth quarter but gross profit, as a percentage of sales, is expected to be flat. That disparity is enough to drive investors to the sidelines.

Still, considering they're the biggest discount retailer in the nation, by store count, this may just be a rough patch that they need to power through.

TheArmoTrader
Via @andrezdanow: "(Dollar General) $DG ceo says customer uncertainty creating more promotional environment" ... hmmm

That makes sense. If you want to keep customer loyalty high and sales are drooping, what better way to entice consumers to spend than with some nice discounts? The company is still opening new stores so it may just be a matter of time before they get back on solid ground.

MarketPicker
Nibbled a little $DG long here near the half mark. I will get though if it doesn't work, as I don't feel like giving back profits from short

Join the Conversation
Fear & Greed
Sponsored by
About This Author
Catherine Tymkiw
Catherine Tymkiw
News Editor CNNMoney

Catherine Tymkiw is a news editor at CNNMoney where she helps oversee breaking news coverage and futures planning. Previously, she was the investing editor. Prior to joining CNNMoney, she was the online editor at Crain's New York Business and has nearly two decades of reporting and editing experience. She tweets @ctymkiwcnn

To view my watchlist

Not a member yet?

Sign up now for a free account
Stupid Stock Move of the Day
#StupidStock Move of the Day! $SPLS up 8% on analyst report about $ODP M&A chatter? Three wrongs ($ODP owns OfficeMax) don't make a right.
Powered by WordPress.com VIP.
Follow

Get every new post delivered to your Inbox.

Join 232 other followers