This week’s Sunday Earnings Sheet is off to a good start, with Dollar General selling off 5%+ on cuts to its future revenue and earnings outlook, making our bearish call on the company a profitable one.
A few key takeaways:
- Consumer Purchase Intent (PI) Mentions pulling back in late summer is unusual for this company
- Stock near all-time highs as PI mentions slide provided a classic divergence opportunity.
- Bet was not necessarily that Dollar General would miss Q3 numbers, but rather that the company’s performance wouldn’t support the high share price.
- Dollar General is one of our best performing companies using PI data, historically:
The Week Ahead
It’s nice to start out with a win, especially as our late-season performance continues to shine. Now it’s time to turn to the week ahead.
With markets closed Wednesday, we are actually looking at 4-5 really solid earnings plays worth entering today… a surprisingly high number for this point in the earnings season!
Best of luck to all of us… let’s keep it going!