Latest news with #Vasos
New York Post
2 days ago
- Business
- New York Post
Dollar General sees increase in higher-income shoppers looking to stretch their dollars
Dollar General is luring in more higher-income households as shoppers tighten their spending amid growing concerns around the economy. CEO Todd Vasos told analysts during the company's first-quarter earnings call on Tuesday that new customers this year are shopping more often and spending more per visit compared with new customers last year. They are also allocating more of their spending to discretionary categories. 'We believe these behaviors suggest that we are continuing to attract higher-income customers who are looking to maximize value while still shopping for items they want and need,' Vasos said. The company has seen more middle- and higher-income earners. During the three-month period ending in May, the company saw the highest percentage of these customers that it's seen in the last four years, according to Vasos. 'We are pleased to see this growth with a wide range of customers and are excited about our ongoing opportunity to grow share with them,' Vasos said. 3 Dollar General is attracting more high-end shoppers as regular customers have tightened their spending amid growing concerns about the current economic state of the country. REUTERS However, Vasos acknowledged that the company's core customer remains financially constrained. About 60% of them admitted in a recent survey that they felt the need to sacrifice some necessities in the coming year. Arun Sundaram, equity analyst at CFRA Research, told FOX Business that there are more higher-income households shopping at discounters, including dollar stores, mass merchandisers and club stores, in part because of 'growing price sensitivity amid persistent inflation and broader economic uncertainty.' 3 CEO Todd Vasos revealed that the company's first-quarter earnings show that new customers shopping are spending significantly more compared to new customers from a year ago. REUTERS While economic pressure is a factor, Sundaram said that 'retailers are also actively positioning themselves to appeal to a broader income base.' 'Dollar General is expanding its partnership with DoorDash, which supports higher-income household penetration through delivery convenience,' Sundaram said. 'Dollar Tree is also attracting more affluent shoppers by rolling out its multi-price point strategy to more stores, including introducing more discretionary items at $3 and $5 price points.' 3 Vasos said, 'these behaviors suggest that we are continuing to attract higher-income customers who are looking to maximize value while still shopping for items they want and need.' Getty Images He also cited Walmart's robust subscription program, Walmart+, as an example, saying it 'aligns well with its rapidly growing e-commerce business.' Walmart has also continued to gain higher earners in back-to-back quarters.
Yahoo
3 days ago
- Business
- Yahoo
Why Dollar General Corporation (DG) Skyrocketed On Tuesday
We recently published a list of . In this article, we are going to take a look at where Dollar General Corporation (NYSE:DG)stands against other Tuesday's best performers. Dollar General grew its share prices by 15.85 percent on Tuesday to finish at $112.57 apiece as investors cheered the company's increasing number of middle- and high-income household customers. Dollar General Corporation (NYSE:DG), which mostly targets the low-income class, said Tuesday that it is now seeing an increasing number of middle- and high-income households checking out its offerings, a trend that it didn't experience for years. A busy shopping aisle filled with discounted items in a retail store. According to its CEO, Todd Vasos, the low-income shoppers, however, remain financially stressed. Based on its own study, Vasos said that one fourth of its surveyed customers reported having less income than a year earlier, while 60 percent said that they 'felt the need to sacrifice some necessities in the coming year.' In the first quarter of the year, Dollar General Corporation (NYSE:DG) netted $391.9 million, higher by 7.87 percent than the $363 million registered in the same period last year. Net sales also grew by 5 percent to $10.4 million from $9.9 million year-on-year. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Axios
3 days ago
- Business
- Axios
Dollar General sees uptick in middle- and higher-income customers
Customers spent more per trip at Dollar General last quarter, a sign that higher-income shoppers may be looking to save — and possibly stocking up ahead of expected tariffs. Why it matters: Dollar stores have been struggling as Americans turned to budding alternatives such as same-day delivery from the likes of Amazon and Walmart. Driving the news: Dollar General Tuesday raised its earnings forecast for the first time since the 2022 fiscal year, after beating revenue expectations with sales jumping 2.4% at stores open at least a year. The discount retailer set its all-time quarterly sales record of $10.4 billion as average transaction amounts rose 2.7% in the quarter spanning most of February, March and April. CEO Todd Vasos said on an earnings call Tuesday that while the company's core customer "remains financially constrained," Dollar General has seen more activity from both middle- and higher-income customers. Zoom in: The company is also avoiding a big blow from tariffs. Less than 10% of the company's goods come directly from foreign markets, Vasos said. It is mitigating impacts where it can, though Vasos said the company expects tariffs to result in some price increases "as a last resort." Yes, but: While the average customer spent more per trip, the number of customers visiting Dollar General stores declined by 0.3%.
NBC News
3 days ago
- Business
- NBC News
Dollar General is shaking off tariff fears and winning over higher-income consumers
Shares of Dollar General jumped nearly 16% on Tuesday after the discounter raised its outlook, saying it drew more middle- and higher-income shoppers amid fears that higher tariffs would hurt consumer spending. The Tennessee-based retailer beat quarterly expectations for revenue and earnings. The company said it now anticipates net sales will grow about 3.7% to 4.7%, compared to its previous expectation of about 3.4% to 4.4%. It expects diluted earnings per share to range from $5.20 to $5.80, compared to its prior outlook of approximately $5.10 to $5.80. Dollar General anticipates same-store sales will increase 1.5% to 2.5%, higher than its previous guidance of about 1.2% to 2.2%. Here's how the retailer did for the fiscal first quarter compared with Wall Street's estimates, according to a survey of analysts by LSEG: Earnings per share: $1.78 vs. $1.48 expected Revenue: $10.44 billion vs. $10.31 expected In the three-month period that ended May 2, Dollar General reported net income of $391.93 million, or $1.78 per share, compared with $363.32 million, or $1.65, in the year-ago quarter. As of Tuesday's close, shares of Dollar General have risen about 48% so far this year. That far exceeds the roughly 1% gains of the S&P 500 during the same period. Shares of the retailer closed at $112.57 on Tuesday, bringing Dollar General's market value to $24.76 billion. Dollar General's first-quarter results — and its stock performance — stand out in a retail industry that is already taking a hit from President Donald Trump's tariffs. Companies including Best Buy, Macy's and Abercrombie & Fitch have cut their profit outlooks due to tariffs. On an earnings call Tuesday, Dollar General CEO Todd Vasos said the company has worked to reduce its exposure to China — and limit price hikes for shoppers. He said the retailer has worked with vendors to cut costs, moved manufacturing to other countries and made changes to its products or swapped them out for other merchandise. He said direct imports make up about a mid- to high single-digit percentage of its overall purchases and indirect imports are about double that. 'While the tariff landscape remains dynamic and uncertain, we expect tariffs to result in some price increases as a last resort, though, we intend to work to minimize them as much as possible,' he said. CFO Kelly Dilts said on the company's earnings call that full-year guidance assumes that Dollar General will be able to offset 'a significant portion of the anticipated tariff impact on our gross margin, but also allows for some incremental pressure on consumer spending.' Customer traffic dipped by 0.3% in the first quarter compared to the year-ago period, but shoppers spent more when they visited. The average transaction amount rose 2.7%, as sales in the food, seasonal, home and apparel categories all grew. Vasos added tariffs have also increased U.S. consumers' desire to find deep discounts. Vasos said the company's first-quarter results reflect Dollar General's gains from 'customers across multiple income bands seeking value.' He said store traffic and the company's market research indicates that more middle- and higher-income customers have come to its stores more frequently and spent more when they visited. 'We are pleased to see this growth with a wide range of customers and are excited about our ongoing opportunity to grow [market] share with them,' he said. Those gains have helped as Dollar General's core customer 'remains financially constrained,' Vasos said. According to a survey by the company, he said 25% of customers reported having less income than they did a year ago and almost 60% of core customers said 'they felt the need to sacrifice on necessities in the coming year.' Dollar General's sales largely come from U.S. consumers who are on a tight budget. About 60% of the retailer's sales come from households with an annual income of less than $30,000 per year, Vasos said last fall at a Goldman Sachs' retail conference. In addition to wooing value-conscious shoppers, Dollar General has tried to tackle company-specific problems that drew government scrutiny and tested customer loyalty. The discounter, which has more than 20,000 stores across the country, has paid steep fines to the Labor Department for workplace safety violations due to blocked fire exits and dangerous levels of clutter. Vasos highlighted some of the ways that Dollar General has tried to improve the customer experience. Among them, it's worked to reduce employee turnover, and it took about 1,000 individual items off its shelves so it can keep top-selling items in stock, he said. Dollar General has launched its own home delivery service, which is now available at more than 3,000 stores. Its deliveries through DoorDash have grown, too, with sales up more than 50% year over year in the quarter. Dollar General has also bulked up its merchandise categories outside of the food and snack aisles, adding more discretionary items like seasonal decor and home items. Vasos said sales in those categories have also gotten a boost from middle- and higher-income customers shopping its stores. Its newer store chain, Popshelf, sells mostly discretionary items and caters to consumers with higher household incomes than Dollar General's typical shoppers. Vasos did not share a specific metric for the chain, but said Popshelf's same-store sales delivered strong growth in the quarter. The company recently changed the store layout to emphasize toys, beauty and party candy.
Yahoo
3 days ago
- Business
- Yahoo
More Middle- and High-Income Earners Are Turning to Dollar General, CEO Says
Dollar General is serving more middle- and high-income households than it has in four years, said CEO Todd Vasos Tuesday. The company's core clientele remains under financial pressure, Vasos said, citing recent customer surveys. Ollie's Bargain Outlet also reported signs of consumer stress on Tuesday. Discount-store competitor Dollar Tree will release first-quarter results Wednesday.A new clientele of middle- and high-income households is shopping at Dollar General. The discount retailer hasn't served such a high percentage of these higher-income customers in years, executives said on a quarterly earnings conference call Tuesday. The statements, from CEO Todd Vasos, echo statements made in recent months by other value-oriented retailers that have seen wealthier customers check out their offerings. 'We saw the highest percent of trade-in customers we've had in the last four years,' in the first quarter, CEO Todd Vasos said, according to a transcript made available from AlphaSense. Those 'trade-in customers' are drawn to the value and new delivery options available at Dollar General (DG), Vasos said. The company's core lower-income shoppers, meanwhile, are financially stressed, according to Vasos, reiterating a theme that came up on last quarter's call. One-quarter of surveyed customers reported having less income than a year earlier, and 60% said they 'felt the need to sacrifice some necessities in the coming year,' Vasos said Tuesday. Low prices are critical near the end of the month when some Dollar General shoppers' money runs out, Vasos said. Shares of Dollar General were up 16% at close to nearly $113 and led S&P 500 gainers on Tuesday after the company released first-quarter results that beat Wall Street's expectations and raised its forecast for the year ahead. Customers at Ollie's Bargain Outlet (OLLI) have been concentrating on 'immediate needs' and buying 'consumer staples,' CFO Robert Helm said on that company's earnings conference call Tuesday. Ollie's Bargain Outlet also surpassed analysts' expectations and lifted its outlook, but its shares were down 2% to almost $110 at close Tuesday. Dollar Tree (DLTR) is scheduled to release first-quarter results before the bell on Wednesday. Analysts expect the chain to report a 3.8% year-over-year bump in comparable store sales, but warned that tariffs and sluggish discretionary spending may weigh on its performance. Read the original article on Investopedia
