Dollar General (DG) disappointed Wall Street on Thursday by posting a lighter-than-expected 1.5% rise in fourth-quarter profits and below-consensus guidance as the discount retailer grappled with severe winter weather.

The company said it earned $322.2 million, or $1.01 a share, last quarter, compared with a profit of $317.4 million, or 97 cents a share, a year earlier. Analysts had called for EPS of $1.02

Revenue rose 6.8% to $4.49 billion, trailing the Street’s view of $4.62 billion. Same-store sales increased 1.3%, while gross margins shrank to 31.9% from 32.5%.

“Sales in the fourth quarter were impacted by severe winter weather, including many days with significant store closures, an aggressive competitive retail landscape and our customers` uncertainty about spending in the current economic environment,” Dollar General CEO Rick Dreiling said in a statement.

Dollar General expects to post first-quarter EPS of 72 cents to 74 cents on a 2% to 3% increase in same-store sales. Even the high end of the EPS range would miss projections on Wall Street for EPS of 81 cents.

For the full year, management sees EPS of $3.45 to $3.55 on a 3% to 4% rise in same-store sales. Analysts had been modeling for stronger EPS of $3.69.

Dreiling acknowledged Dollar General remains “cautious on the current operating environment and the many challenges our customer is facing in 2014,” but expressed confidence in the company’s business model.

Shares of Dollar General lost 2.63% to $57.73 in premarket trading Thursday morning, threatening to trim their 12-month rally of 23%.

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