Dollar General is said to be looking for a new CEO.
Spencer Platt/Getty ImagesDollar General was lower on Tuesday following reports that the discounter might be looking for a new chief executive.
After the close of regular trading Monday, Reuters reported that Dollar General (ticker: DG) was “taking steps to find a potential successor” to current CEO Todd Vasos. Citing people familiar with the matter, the report says that while no decision has been made about Vasos’s departure, the company is considering potential candidates, from both within the company—including Chief Operating Officer Jeff Owen —and outside.
A company spokesperson says that Dollar General has been “speaking with management consulting firms related to executive development programs and as part of our succession planning process. We have not entered into a contract with any such firm to date.”
Vasos has been CEO of Dollar General since 2015, and his contract is up for automatic renewal in June. He joined the company in 2008.
Dollar General was down 1.4%, to $196.09, following the reports.
It may be no surprise that investors are anxious about the potential that Vasos may step down. He has presided over a period of huge gains for Dollar General, including most recently an initiative to introduce more fresh foods and produce to its stores, which many analysts are enthusiastic about. Barron’s highlighted the move when recommending the stock last summer; the shares are up 11.6% since.
That said, at least one analyst argues that the selloff is an opportunity for investors. Jefferies’ Corey Tarlowe reiterated a Buy rating and $260 price target on Dollar General, writing that “despite this news, and the positive impact Mr. Vasos has had on the company thus far, our thesis on the stock remains largely unchanged.”
He is still optimistic that the company will continue to win market share and expand margins, and be able to handle rising wages.
Other analysts have also highlighted the benefit Dollar General could see from an expanded child tax credit and new merchandise.
Write to Teresa Rivas at teresa.rivas@barrons.com
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Dollar General Stock Slips on Report of Possible CEO Change - Barron's
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