That’s left economists and commentators to play a recession guessing game for the past year and a half, parsing every earnings report and unemployment data point to try to anticipate when the downturn will hit, how long it will last, and how badly it will hurt. Owen also said he believes customers were caught off-guard by reduced tax refunds and reduced SNAP benefits, “which exacerbated the inflationary pressures they were already experiencing.”ĭollar General’s results echo those of rival Dollar Tree, which also came in below investors’ expectations last week and cut its profit outlook for the year.Įconomists haven’t yet declared a US recession - that designation has to come from a panel of eight bureaucrats you’ve never heard of at the National Bureau of Economic Research, and they’ll only weigh in after the downturn has already begun. The company says its “core customer” makes less than $40,000 a year. “Unfortunately, our customers are saying they’re having to rely more on food banks, savings, credit cards,” CEO Jeff Owen said on a call with analysts Thursday. Macy's and Costco sound a warning about the economy People walk past Macy's in Herald Square on in New York City. When Dollar General’s core customers feel strained, they pull back completely. When high- and middle-income shoppers feel strained, they tend to shift their spending - buying chicken instead of beef, say, or getting their home goods from Walmart instead of West Elm. ![]() But Dollar General’s worse-than-expected results point to a more-troubling reality for the nation’s consumer-dependent economy. Put simply: We already knew that American consumers were hurting because other retailers’ results - including Macy’s, Costco and Target - showed consumers pulling back on discretionary items. That news is a giant red flag for the broader US economy. Dollar General now expects sales to rise between 1% and 2% (down from an earlier forecast of about 3%) and expects earnings to fall 8% year over year. The discount retailer’s shares fell 20% Thursday after the company slashed its earnings forecast for the year. ![]() ![]() Dollar General’s stock just had one of its worst days ever on Wall Street.
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