08:55 AM EDT, 08/29/2024 (MT Newswires) -- Dollar General ( DG ) lowered its full-year outlook on Thursday amid softening sales trends, as the discount retailer's fiscal second-quarter results missed Wall Street estimates.

The company now anticipates per-share earnings to come in between $5.50 and $6.20 for fiscal 2024, down from its previous projections of $6.80 to $7.55. Sales are set to rise by roughly 4.7% to 5.3% versus the prior guidance for a 6% to 6.7% increase. The consensus on Capital IQ is for GAAP EPS of $7.12 and revenue of $41.02 billion.

Same-store sales growth is pegged at about 1% to 1.6% for the ongoing fiscal year, compared with the previous forecast for a 2% to 2.7% gain. The Street is looking for same-store sales to incline by 2.5%. The stock tumbled 24% in premarket activity.

The outlook revision reflects softer sales trends and related gross margin impacts, which are expected to continue through the remainder of the fiscal year, according to the retailer. "While we believe the softer sales trends are partially attributable to a core customer who feels financially constrained, we know the importance of controlling what we can control," Chief Executive Todd Vasos said in a statement.

For the three-month period ended Aug. 2, Dollar General's ( DG ) net income dropped 20% year over year to $1.70 a share, missing the Street's view for $1.79. Sales advanced 4.2% to $10.21 billion, but trailed analysts' $10.37 billion estimate.

Same-store sales edged up 0.5% during the quarter, below the 2.1% increase modeled by the market. Higher customer traffic was partially offset by a lower average transaction amount. Same-store sales rose in the consumables category, but home, seasonal and apparel products all recorded declines, according to the company.

"We made important progress on our Back to Basics plan in the second quarter," Vasos said. "However, despite advancing several of our operational goals and driving positive traffic growth, we are not satisfied with our financial results, including top line results below our expectations for the quarter."

Gross profit as a percentage of sales slipped 112 basis points year over year to 30%, mainly due to increased markdowns and inventory damages, among other factors. Selling, general and administrative expenses rose to $2.51 billion from $2.35 billion in the prior-year quarter.

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