3 takeaways from Dollar General, Dollar Tree earnings that sent stocks soaring

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3 takeaways from Dollar General, Dollar Tree earnings that sent stocks soaring

PUBLISHED THU, MAY 26 2022 | 1:40 PM EDT | UPDATED THU, MAY 26 2022 | 6:10 PM EDT

Melissa Repko
@MELISSA_REPKO

KEY POINTS
• Dollar Tree and Dollar General boosted their outlook for the year, as shoppers squeezed by inflation seek cheaper prices.
• The companies are seeing people buying a different mix of merchandise than they were a year ago, when they had stimulus dollars in their pockets.
• The dollar chains are also expanding while trying to strategize about ways to manage higher costs.

Shares of Dollar General and Dollar Tree popped Thursday, as the discounters beat Wall Street’s quarterly earnings expectations, raised outlooks for the coming year and spoke of consumers flocking to lower prices during inflationary times.

Dollar General shares rose 13.71% to close at $222.13 on Thursday. Dollar Tree shares jumped 21.87% to close at $162.80.

The two retailers said they see opportunity to grow as Americans weigh value more heavily in their purchasing decisions, whether buying groceries or seasonal decor.

“We’re already starting to see our core customers start to shop more intentionally,” Dollar General CEO Todd Vasos said on a call with analysts. “And we’re starting to see that next tier of customers start to shop with us a little bit more as well.”

{snip}

[bucolic_frolic]

1. Any retailer with high dollar goods has excess baggage at this point

As sales plunge they raise prices on food to try to maintain profit margins while simultaneously advertise they have low, low prices.

"Low, low prices" are a bugaboo with me. Any time I see it, in parking lot banners or on TV, it's because they just raised prices big time.

[Tomconroy]

2. I think Macy's had a good outlook going forward but Walmart

did not.
I'm still trying to figure things out.

[samplegirl]

3. Things are changing for sure.

My friend told me Sams Club is now carrying GAP
Clothing and Levi’s.

[House of Roberts]

4. I spend less time in my nearby Family Dollar than I ever did.

Kroger has better deals, and Publix has bogo which is about all I ever buy there. I have caught Publix increasing prices prior to items going on bogo recently.

Since I'm no longer working, I don't need snacks to take to work and they never have any cat food I'd buy for my cats anyway.

[SWBTATTReg]

5. What do I give a hoot about these billionaire-owned companies, fighting to retain their

billion-dollar profit margins while only having one worker working in each store? I quit shopping at these stores a long time ago when I discovered the constant shrinkage of their products every time I went into the stores.

I got tired of it really quickly. Their portions aren't anything to write home to Grandma about, and their prices aren't that great either, considering you're buying an undersized portion of the product.

You're better off going to a reputable grocery store chain like Schnucks or something like that, that'll try and give you a decent bang for your buck AND pay its people a decent salary/hourly rate. Don't support these billion-dollar rip offs, in either their rip off of employees (the pay or the number working in each store, one usually, maybe, maybe two employees) or their undersized portions.

[Chainfire]

6. Dollar General will go into rural areas where there is no competition and clean up.

It is the only place to buy "groceries" within ten miles of me. (I do drive to a real grocery store) The local stores are dirty, the isles are usually blocked with un-shelved merchandise. And when I go into the store about once every two weeks or so, they have a new store manager and staff. There is a reason that they can't keep employees even in a depressed area.

[SWBTATTReg]

7. An unfortunate thing indeed. A lot of small towns have no choices available to them, other

than the local Dollar Generals...kind of like Ben Franklin was in the days before Walmart's became so dominant, and BF's went by the way of the dinosaurs.

So I do give them a tiny bit of credit, that DGs do have a presence whereas in many situations, there wouldn't be a store or anything else there in that little town, or bad neighborhood in a larger city. You're right about the constant changeover of personnel at these stores, I never see the same people that are working there, each time I go there.

If I do go shopping in this one rural area where my folks live at, we support and go shop at their local rural convenience mart (it's a tourist trap too, for those fishermen who come to the area to go trout fishing). It beats driving all of the way to town (25 miles each way) and plus, we're supporting good friends of my Mom and Dad's. Unfortunately, one of the main partners (out of 3) passed away, and the store is no longer there. What a shame. No one came in, and took over mgmt of the place, who knows, it could have had a lot of things that needed to be done before transfer of new ownership could occur.

Perhaps too, they had issues in getting help too?

[Chainfire]

8. I felt sort of sorry for one of the employees

at a DG. I was waiting in line to check out a couple of items and she cheerfully suggested that I might just use the self-checkout.
I refuse to use the things because I know that they are just one more way to remove one more job from the market and, at the end of the day, make one more dollar. If I were a store clerk, the management would wonder why those damn self-checkout units kept breaking. Yea, I might have a little Socialist in me.