Dollar General Reinstates Former CEO, Stock Surges Significantly
Dollar General's shares skyrocketed following the return of its former CEO, as the retailer aims to bounce back from recent financial challenges.
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Highlights
- Shares of Dollar General jumped more than 9% after the company rehired its previous CEO amid efforts to overcome a recent downturn.
- Todd Vasos resumes leadership less than a year after stepping down from his seven-year tenure as CEO.
- The company revised its full-year outlook, tightening projections for revenue, same-store sales, and earnings per share.
Dollar General Corp. (DG) emerged as the top-performing stock in the S&P 500 on Friday, with shares climbing over 9% following the announcement that Todd Vasos, the former CEO, is returning to steer the discount retailer back to financial stability.
Vasos, who retired in 2022 after leading the company for seven years, replaces Jeff Owen, who served as CEO for less than a year.
Chairman Michael Calbert stated that the leadership change was essential to reestablish stability and investor confidence moving forward.
The retailer has faced challenges due to shifting consumer spending patterns amid rising inflation, with customers prioritizing grocery purchases over higher-margin items like apparel and home goods. Additional pressures include increased capital expenditures and higher shrinkage rates.
In conjunction with Vasos's return, Dollar General narrowed its full-year guidance: sales growth is now expected between 1.5% and 2.5%, down from the previous 1.3% to 3.3% range; same-store sales are projected to be flat or decline up to 1%, versus an earlier forecast of a 1% decline to 1% growth; and earnings per share are anticipated between $7.10 and $7.60, reflecting a 29% to 34% decrease compared to last year, tightening from the prior estimate of $7.10 to $8.30.
Despite Friday’s gains, Dollar General shares recently touched a nearly five-year low and have lost over half their value so far this year.
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