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Dollar General hasn’t drawn in so many middle- and high-income households in years, its executives said on an earnings call TuesdayKey Takeaways
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Dollar General is serving more middle- and high-income households than it has in four years, said CEO Todd Vasos Tuesday.
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The company's core clientele remains under financial pressure, Vasos said, citing recent customer surveys.
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Ollie's Bargain Outlet also reported signs of consumer stress on Tuesday. Discount-store competitor Dollar Tree will release first-quarter results Wednesday.
A new clientele of middle- and high-income households is shopping at Dollar General.
The discount retailer hasn’t served such a high percentage of these higher-income customers in years, executives said on a quarterly earnings conference call Tuesday. The statements, from CEO Todd Vasos, echo statements made in recent months by other value-oriented retailers that have seen wealthier customers check out their offerings.
“We saw the highest percent of trade-in customers we've had in the last four years,” in the first quarter, CEO Todd Vasos said, according to a transcript made available from AlphaSense. Those “trade-in customers” are drawn to the value and new delivery options available at Dollar General (DG), Vasos said.
The company's core lower-income shoppers, meanwhile, are financially stressed, according to Vasos, reiterating a theme that came up on last quarter’s call.
One-quarter of surveyed customers reported having less income than a year earlier, and 60% said they “felt the need to sacrifice some necessities in the coming year,” Vasos said Tuesday.
Ollie's Also Notes Focus on 'Consumer Staples'
Low prices are critical near the end of the month when some Dollar General shoppers’ money runs out, Vasos said. Shares of Dollar General were up 16% at close to nearly $113 and led S&P 500 gainers on Tuesday after the company released first-quarter results that beat Wall Street’s expectations and raised its forecast for the year ahead.
Customers at Ollie's Bargain Outlet (OLLI) have been concentrating on “immediate needs” and buying “consumer staples,” CFO Robert Helm said on that company's earnings conference call Tuesday.
Ollie’s Bargain Outlet also surpassed analysts’ expectations and lifted its outlook, but its shares were down 2% to almost $110 at close Tuesday.
Dollar Tree (DLTR) is scheduled to release first-quarter results before the bell on Wednesday. Analysts expect the chain to report a 3.8% year-over-year bump in comparable store sales, but warned that tariffs and sluggish discretionary spending may weigh on its performance.
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