Dollar General earnings: will another company add its voice to the recession alarm bells?

US discount chain store giant Dollar General reports its Q1 FY 2024 earnings tomorrow, with a webcast on the results just after US markets open.

What do the Dollar General earnings mean?

Those who aren’t Dollar General investors may not appreciate the significance of the results. Typically, rising popularity for dollar stores such as Dollar Tree indicate a downturn in the US economy, as people buy more at discount stores.

Dollar General, Walmart and Dollar Tree, for instance, did very well during both the pandemic and in 2009 after the global financial crisis.

Forecasts for Dollar General earnings

Experts’ opinions on what the results will bring are mixed, with optimism and pessimism both rearing their heads.

On the one hand, earnings per share (EPS) are expected to drop significantly, from $2.34 for last year to just $1.58 per share for this Q1. That’s a fall of over 30%.

But then again, some analysts are also forecasting that the corporation will post a significant rise in sales – with over $9.5 billion anticipated – which would mean earnings would likely rise more than 5%, compared with Q1 the previous 2023 financial year.

The Dollar General stock price

And indeed, the Dollar General Corporation’s stock price has been looking perkier lately.

While Dollar General’s earnings are down close to 30% year-on-year at the time of this article’s writing (more than a day before the earnings), they’ve risen by 1.25% in the past month and more than 12% in the past 6 months.    

Other signs of trouble

This is not the only harbinger of US recession to have come out recently. Yesterday, the United States’ Conference Board released its latest US consumer confidence numbers for April 2024.

According to the release, April’s numbers for the Expectations Index were for the fourth consecutive month, below 80. According to the Conference Board, 80 is “the threshold which usually signals a recession ahead.”