What Happened: Shares of discount retailer Dollar General (NYSE:DG) jumped 6.61% in the after-market session after the company announced the return of Todd Vasos as CEO. Vasos is taking over from Jeff Owen, who is officially leaving the company and stepping down from its board today. During Vasos's previous tenure, Dollar General experienced significant growth and innovation, including expanding its store base, increasing annual sales, and doubling its market capitalization. The board of directors added that "a change in leadership is necessary to restore stability and confidence in the Company moving forward."
Additionally, Dollar General narrowed its outlook for fiscal year 2023. The company now anticipates revenue to grow between 1.5% and 2.5%, compared to the previous forecast of 1.3% to 3.3%. Diluted EPS is expected to fall between $7.10 and $7.60, a revision from the prior estimate of approximately $7.10 to $8.30.
Is now the time to buy Dollar General? Find out by reading the original article on StockStory.
What is the market telling us: Dollar General's shares are not very volatile than the market average and over the last year have had only 5 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about one month ago, when the stock dropped 16.3% on the news that the company reported second quarter results with both its revenue and EPS missing analysts' expectations. Gross and operating margins declined year on year. Additionally, the company lowered full year guidance across the board, with a particularly jarring reduction in EPS outlook. Management acknowledged this, saying "While we are not satisfied with our overall financial results, we made significant progress in the second quarter improving execution in our supply chain and our stores, as well as reducing our inventory growth rate and further strengthening our price position." Overall, this was a mediocre quarter for Dollar General.
Dollar General is down 55.5% since the beginning of the year, and at $110.33 per share it is trading 57.6% below its 52-week high of $260.44 from October 2022. Investors who bought $1,000 worth of Dollar General's shares 5 years ago would now be looking at an investment worth $1,030.
