- Dollar General and Dollar Tree shares surged Thursday after upbeat financial updates from the discount retailers.
- Dollar General raised its 2022 same-store sales view, and Dollar Tree increased its 2022 sales forecast.
- Wall Street has been worried about consumers who are facing higher prices for basic goods.
Dollar General and Dollar Tree jumped Thursday after raising their guidance for 2022, bolstered by shoppers heading to the discount retailers with inflation burning at a four-decade high.
"Despite ongoing headwinds due to supply chain pressures and heightened inflation, we remained focused on controlling what we can control and delivered solid financial results, which exceeded our expectations for sales and EPS for the quarter," Todd Vasos, Dollar General's CEO, said in the company's first-quarter earnings report.
Dollar General stock spiked 12% to $219.42 in early trade.
Shares of Dollar Tree surged 17% to $156.41. It said first-quarter sales rose by 6.5% to $6.9 billion and that customers are "responding favorably" to its increased $1.25 price point.
The upbeat updates were in contrast to missed earnings expectations by retailer behemoths Target and Walmart last week that raised worries about how well shoppers are faring in the face of higher prices for gas, food and energy. Consumer price inflation in April reached 8.3%, slightly easing from March's 41-year high of 8.5%.
Dollar Tree increased its full-year 2022 net sales outlook to a range of $27.76 billion to $28.14 billion from its previous range of $27.22 billion to $27.85 billion.
At Dollar General, 2022 same-store sales are now seen rising 3% to 3.5%, up from its previous forecast of 2.5% growth.
Stock in each company has lost ground during 2022. Dollar General was off by 17% through Wednesday and Dollar Tree had declined by nearly 5%.