Dollar General forecasts annual profit below estimates By Reuters

© Reuters. Dollar General shopping carts are seen outside a store in Mount Rainier, Maryland, U.S., June 1, 2021. REUTERS/Erin Scott

(Reuters) -Dollar General Corp on Thursday forecast full-year profit below analysts’ estimates, as surging supply chain costs pinch the discount retailer’s margins, sending its shares down nearly 4% in premarket trading.

Increasing freight costs caused by bottlenecks at ports and other global supply-chain disruptions have dented profits across industries, and could especially hurt dollar stores that operate on razor-thin margins as they keep prices as low as possible.

The company said its expects fiscal 2021 earnings per share of $9.60 to $10.20, below estimates of $10.24, according to IBES data from Refinitiv.

Same-store sales fell 4.7% in the second quarter ended July 30, beating analysts’ average estimate of a 5.1% drop.

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