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(Reuters) -Dollar General on Thursday brought back former chief Todd Vasos to replace CEO Jeffery Owen less than a year after his appointment, in a move to stabilize its struggling business, sending shares of the company up 8% in extended trading.
Shifting consumer spending patterns, particularly among the low- and middle-income groups, elevated inventory levels and retail shrink – inventory lost to theft and damage – have plagued the discount retailer’s margins in recent quarters.
With Vasos’ appointment, Dollar General (NYSE:) hopes “to restore stability and confidence” in the company, whose stock has lost more than half its value so far this year.
But for now, the company trimmed its annual sales and profit estimates for a third time, just over a month after it forecast a steep drop in annual profit and missed market expectations for second-quarter results.
Vasos “is acutely aware of the challenges facing our business and the industry more broadly” Dollar General said, adding his appointment was effective immediately.
During Vasos’ earlier stint between June 2015 and November 2022, the company’s annual revenue had risen more than 80% and about 7,000 more stores were added to the retailer’s footprint.
The company now expects a decline between 29% and 34% in 2023 profit per share, compared with the previous estimate of a 22% to 34% decline.
It tightened the range of its annual net sales growth outlook to 1.5% to 2.5%, from a prior range of 1.3% to 3.3% growth.
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