In an effort to reduce costs and improve efficiency, leading discount retailer Dollar General Corporation DG, has announced its decision to lay off 255 employees, effective immediately. The company’s shares which had already dropped 0.8% during yesterday’s trading hour, declined further 0.8% in after-market trading session following the news.
Notably, Dollar General stated that jobs at the company’s stores will not be affected. Out of the 255 positions, 115 are vacant. The company further added that it has been evaluating its cost structure for some time now and is trying to improve its financial flexibility to attend long-term growth.
In fiscal 2016, Dollar General intends to continue with its cost-control and reduction initiatives by employing a more effective budgeting process.
We believe that the company’s commitment toward better price management, cost containment, private label offering, effective inventory management, merchandise and operational initiatives would drive sales and margins. Moreover, in order to increase traffic, Dollar General is focusing on both consumables and discretionary categories.
The roll out of tobacco has been a key traffic driver. In addition, the company is expanding its cooler facilities, to enhance the sale of perishable items, as well as launching the DG digital coupon program.
Zacks Rank
Dollar General currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in this sector include Big Lots Inc. BIG, Burlington Stores, Inc. BURL and Target Corp. TGT. All these stocks have a Zacks Rank #2 (Buy).
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