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Increasing freight costs caused by bottlenecks at ports and other global supply-chain disruptions have hit all industries, and could especially torment dollar stores that operate on razor-thin margins as they keep prices as low as possible.
Dollar General (NYSE:DG) said higher transportation costs helped lead to an 80 basis point decline in its second-quarter gross profit margin.
The company said it expects fiscal 2021 earnings per share of $9.60 to $10.20, compared with its prior forecast of $9.50 to $10.20. However, the numbers were still below analysts’ average estimate of $10.24, according to IBES data from Refinitiv.
The company’s disappointing new profit outlook also comes despite its expectations of a 0.5% to 1.5% rise in full-year sales, compared with a prior forecast of a 1% decline to an increase of 1%.
Same-store sales fell 4.7% in the second quarter ended July 30, beating analysts’ average estimate of a 5.1% drop.
