Dollar General’s stock experienced a significant surge as it reappointed its former CEO, Todd Vasos, to reinvigorate slowing sales growth and address concerns about working conditions. Vasos, who previously served as the company’s CEO from June 2015 to November 2022, will immediately replace Jeff Owen, according to the company’s announcement on Thursday.
The company’s board expressed their appreciation for Jeff Owen’s contributions during his brief tenure as CEO but felt that a change in leadership was necessary to restore stability and confidence.
Under Owen’s leadership, Dollar General witnessed a slowdown in sales growth and faced criticisms from federal authorities and activists for the alleged unsafe working conditions in its stores, putting employees at risk.
Dollar General, which has been rapidly expanding and increasing its store footprint, operates in more than 19,000 locations across 47 states and employs over 185,000 full- and part-time workers.
Following the news of the CEO change, Dollar General’s stock jumped by over 6% during extended trading on Thursday.
Dollar General’s financial outlook also faced downward adjustments. The company reduced its full-year profit guidance, anticipating earnings per share of approximately $7.10 to $7.60, compared to the prior range of $7.10 to $8.30. Net sales growth expectations were revised to 1.5% to 2.5%, down from the previous forecast of 1.3% to 3.3%. Same-store sales for the year are now expected to be flat to down 1%, compared to the earlier projection of a 1% decline to a 1% increase.
Todd Vasos expressed his honor at rejoining the company during this pivotal time and conveyed his anticipation of working with the team to restore operational excellence for employees and customers while delivering long-term growth and value for shareholders.
The decline in sales has been attributed to mounting pressure from employees and activists concerning working conditions. Shareholders passed a resolution in May, against the board’s objections, to initiate an independent audit of worker safety. However, it remained uncertain whether this resolution was binding and if the company would act on it.
Dollar General has accrued over $21 million in fines from federal authorities for various issues, including blocked fire exits, obstructed electrical outlets, and store clutter. At the time of the shareholder resolution’s passage, a Dollar General spokesperson emphasized the company’s commitment to creating a positive work environment and encouraged employees to provide feedback to address concerns and challenges.
