Q: Hi 5i, thoughts on their results. Selling off hard today. A little confused here as the economy has been very weak and if people are struggling then I would have the discounters would benifit.
5i Research Answer:
Sales in Q4 of $2.1 bln beat estimates of $2.08. EPS of $1.43 beat estimates of $1.42. In 2027, the company expects same store sales growth of 3% to 4% and opening 60-70 net new stores. The quarter itself looked fine but the outlook for 2027 revenues was less than markets were expecting, leading to the weakness.
Discounters do benefit from consumers 'trading down' but DOL is noting that the lower end consumers are also starting to see some pressure. The company still expects growth in the next year, just at a lower level than markets initially thought.