The economy might be heading toward a recession—at least that's the sentiment among investors focused on discount retailers. Last week, Dollar General (DG) issued a downward revision of its forward guidance after a disappointing fiscal second quarter. In response, shares of direct competitor Dollar Tree (DLTR) also fell. With DLTR's earnings report looming, all eyes are now on the stock.
Given the harsh response to Dollar General’s report, investors are understandably nervous. Over the past five sessions, DG stock has plummeted by more than 33%. As highlighted by Barchart content partner The Motley Fool, Wall Street reacted negatively to DG’s lowered full-year guidance. Management initially projected net sales growth of 6% to 6.7%, but this has now been cut to a range of 4.6% to 5.3%.
