Low-cost retailers like Dollar General face stiff competition from bigger retailers like Walmart in the grocery and food business, which has lifted its annual outlook as it offers lower prices on groceries compared to rivals Target Corp (TGT.N).
Shares of Dollar General were set for their worst day on record, if losses hold, as it also said an earnings decline would be "most significant" in the second quarter.
The Tennessee-based company's gloomy outlook echoes disappointing results at its biggest rival Dollar Tree (DLTR.O) last week, which took a hit from slowing demand for non-essentials and elevated cost pressures.
The company's first-quarter same-store sales and profit were also below analysts' average estimate as customers appeared to have reduced their spending budgets.
Reporting by Savyata Mishra in Bengaluru; Editing by Pooja Desai and Dhanya Ann ThoppilOur Standards: The Thomson Reuters Trust Principles.
Persons:
Jeffery Owen, Michael Montani, Kelly Dilts, Savyata Mishra, Pooja Desai, Dhanya Ann Thoppil
Organizations:
General Corp, Walmart, Target Corp, Evercore ISI, Thomson
Locations:
The Tennessee, Bengaluru