(Bloomberg) -- Dollar General Corp. reported comparable sales that were better than the average analyst estimate, a sign that Chief Executive Officer Todd Vasos is having some early success in improving results after taking the helm for a second time in October.
The results come after the company cut its annual earnings forecast in August and said it was planning significant investments to improve the shopping experience. Two months later, Dollar General ousted former CEO Jeff Owen after less than a year in the role and cut sales guidance for a second time, noting a need to “restore stability and confidence.” Owen was replaced by Vasos, who served as CEO from 2015 to 2022 and oversaw a doubling in annual revenue.
“Over the last several weeks, we have spent significant time reviewing all areas of the business, and we have identified key opportunities for improvement both in the near term and over the longer term,” Vasos said in a statement.
The shares rose 1.2% in New York trading at 9:48 a.m. Dollar General shares are down 46% from the start of the year through Wednesday’s close, compared with an 18% gain for the S&P 500 Index.
Adjusted earnings in the third quarter fell to $1.26 a share, better than analysts expected but the lowest in five years. Vasos cited a “significant headwind” from inventory shrink, the industry’s term for products lost to theft, damage or errors.
Same-store sales fell 1.3%, a second-straight decline and the steepest drop in two years.
While dollar stores across the US have been largely resilient as high inflation has consumers looking for deals, Dollar General has struggled with store safety, employee retention and merchandising in recent years. In the third quarter, competitor Dollar Tree reported an increase in comparable sales, suggesting that Dollar General’s woes are related to company-specific challenges rather than macroeconomic factors.
(Updates with shares in fourth paragraph.)
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