NEW YORK (AP) — Discount-store rivals Dollar General and Dollar Tree reported weaker-than-expected sales figures Thursday, as struggling lower-income shoppers spent less at their stores.
Shares of both companies fell sharply.
Dollar General said a cut in food-stamp benefits in several states kept its customers away. It said sales at stores open at least a year, which is considered an important measure of a retailer's health, rose 0.7 percent in its second quarter. That's far below the 2.7 percent increase analysts were expecting, according to FactSet.
At Dollar Tree, the company said food stamp cuts had less of an impact on its sales but said some of its Family Dollar customers were "under pressure." Dollar Tree said sales at stores open at least a year rose 1.2 percent in its second quarter. Analysts expected growth of 2.4 percent, according to FactSet.
Both companies also released financial results for the quarter on Thursday. Dollar General's results were below what Wall Street analysts expected, while Dollar Tree's were mixed.
Dollar General, based in Goodlettsville, Tennessee, has about 13,000 stores around the country. Chesapeake, Virginia-based Dollar Tree has more than 14,000 stores, including Family Dollar, which it bought last year.
Shares of Dollar Tree Inc. fell $8.64, or more than 9 percent, to $86.29 in afternoon trading Thursday. Shares of Dollar General Corp. fell $13.62, or almost 15 percent, to $78.17.