Dollar General's shares plummet 20% after the retailer lowers its outlook, citing "financially constrained" customers.

The discount retailer's lower-income customers are struggling in this economy, as evidenced by its sales and profit guidance being slashed on Thursday.

The retailer that primarily serves rural areas experienced a 20% decline in premarket trading after releasing its earnings report.

The company's outlook for fiscal 2024 same-store sales has been revised to a 1.0% to 1.6% increase, lower than the previous forecast of a 2% to 2.7% rise. Additionally, the earnings per share for the year are now expected to be between $5.50 and $6.20, compared to the prior forecast of $6.80 to $7.55 per share.

Todd Vasos, CEO, stated that while the softer sales trends may be partly due to a core customer feeling financially constrained, it is crucial to manage what we can control.

Dollar General reported lower-than-expected earnings per share and revenue for the latest quarter. EPS came in at $1.70 per share, below an LSEG estimate of $1.79 per share, while revenue was $10.21 billion, lower than the analyst expectation of $10.37 billion.

In early trading, the competitor was losing support, with a decline of over 6%.