Dollar General shares jump as retailer brings back former CEO
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Shares of Dollar General jumped Friday morning after the retailer announced that it was bringing back its former CEO.
The company on Thursday reinstated Todd Vasos as CEO, effective immediately, to help stabilize the business. Vasos replaces Jeff Owen, who had only been in the position since last November.
Vasos, who previously served as CEO from June 2015 to November 2022, plans to sit at the helm for the foreseeable future as he tries to help the company rebound from disappointing quarters and penalties for exposing employees to unsafe working conditions.
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Shares jumped more than 9% Friday morning.
TOUGH ROAD AHEAD
The discount retailer missed estimates in back-to-back quarters as it faced headwinds including declines in customer traffic, shrink, lower inventory markups and inventory damages. It has also seen a greater proportion of sales coming from the consumables category, which is generally less profitable.
A sign hangs above a Dollar General store in Chicago, Illinois. (Scott Olson/Getty Images / Getty Images)
Owen previously told analysts that the macroeconomic environment has been more challenging than expected for its core customer. In August, the company cut its profit and sales expectations.
Federal workplace safety inspectors also discovered in July that Dollar General stores in Tampa exposed employees to fire hazards and other unsafe conditions. The U.S. Department of Labor said this is a continuation of "the long history of disregard for worker safety by one of the nation’s largest discount retailers."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DG | DOLLAR GENERAL CORP. | 137.52 | -2.38 | -1.70% |
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According to the Department of Labor, the company has faced more than $21 million in OSHA fines after more than 243 inspections across the nation since 2017.
Board Chairman Michael Calbert said he is confident in Vasos' ability to help refocus the company.
A customer shops at a Dollar General store in Chicago, Illinois. ( Scott Olson/Getty Images / Getty Images)
"Dollar General has operated from a position of strength for nearly 85 years, and the Board believes Todd is the right leader to refocus the company’s strategic direction and priorities to stabilize the business," Calbert said in a statement.
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During his seven-year stint as CEO, Vasos is credited with leading the company "through a period of significant transformation, accelerated growth and innovation."
During this time, the company expanded its store base by 7,000 locations and added nearly 60,000 jobs. Annual sales revenue also jumped more than 80% and its market capitalization more than doubled.
"I look forward to getting back to work with the broader team as we strive to return to a position of operational excellence for our employees and customers and deliver sustainable long-term growth and value creation for our shareholders," Vasos said in a statement.