The stock market inched higher on Thursday as oil prices and yields take a breather after both recorded declines during the day.
Overall, S&P 500 grew 0.6% to 4,300, while NASDAQ was up 0.8% to 13,201.
Tweet of the Day
No matter how stocks close today, the most benchmarked index in the world has set lower lows for almost two straight weeks.
Almost unprecedented, especially in the last 40 years. Since then, double-digit gains over the next six months.
Not so much in the decades prior 🤢 pic.twitter.com/MfSIZXeS4s
— Jason Goepfert (@jasongoepfert) September 27, 2023
Chart of the Day
Here is the one-year chart of Dollar General (DG) as of September 6, 2023, when the stock was at $126.
Dollar General is the largest discount retailer in the US with 19,104 neighborhood locations in 47 states, as of February 3, 2023. These offer food, snacks, beauty supplies, clothes, housewares, and seasonal items at everyday low prices. Around 20% of its products are priced at $1 or less.
Dollar General reported dismal results last quarter that caused the stock to tank for the second consecutive quarter. Its profits declined by 29% last quarter, and badly missed estimates of -16%. Customers are financially strained, thus management had to lower prices, which caused profit margins to decline. Theft is also high. Operating margin dropped to 7.1% from 9.7% a year ago.
Price cuts on non-consumables will reduce profits by $95 million during the second half of the year. Theft will cut profits by an additional $100 million. The company will also increase its incremental labor from $100 million to $150 million. After the dust settled, analysts cut 2023 profit estimates from $10.07 to $7.74 as the shares crashed to a 52-week low.
DG is part of the Conservative Growth Portfolio. But the stock’s not looking good at this point.
