(Reuters) -Dollar General forecast annual sales largely above Wall Street estimates on Thursday, as the discount retailer benefits from improving demand for essentials such as groceries.
Its shares, which have fallen about 40% this year, were up about 2% in premarket trading as the company also laid out a plan to revamp old stores and open at least 500 new ones next year.
The dollar-store chain operator said it aims to open about 575 new stores in the U.S., while fully remodeling roughly 2,000 stores in the fiscal year ending January 2026.
Dollar General, which has about 19,000 stores in the U.S., echoed main rival Dollar Tree in signaling traffic to stores had improved in the third quarter along with shoppers buying more on average per trip.
Dollar stores have been losing market share to big-box retailers including Walmart with customers complaining about messy shelves and too much inventory.
CEO Todd Vasos said while its core customer base remained financially constrained, sales improved in the quarter due to better execution and the customer experience at its stores.
Dollar General posted third-quarter net sales of $10.18 billion, beating analysts’ average estimate of $10.15 billion, according to data compiled by LSEG.
To attract more shoppers, Dollar General is offering a mega deal with 50% off everyday for 24 days during the holiday season on products ranging from bluetooth speakers to thick cut bacon.
The company now expects annual net sales to rise between 4.8% and 5.1%, compared with analysts’ estimates 4.77%, as per data compiled by LSEG.
Still, Dollar General trimmed the upper end of its annual profit forecast and said it includes the impact of hurricane-related expenses of $32.7 million in the third quarter.
The company expects annual earnings per share in the range of $5.50 to $5.90, compared with its prior forecast range of $5.50 to $6.20.
Dollar General posted earnings of 89 cents per share in the quarter ended Nov. 1, missing estimates of 94 cents.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Sriraj Kalluvila)
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