Struggling Dollar General brings back Todd Vasos as CEO

Todd Vasos’ retirement as CEO of Dollar General lasted less than a year.

The struggling Goodlettsville, Tennessee-based discounter on Thursday announced the immediate resignation of Jeffery Owen—who had held the chief executive post since November after serving as COO—and the appointment of Vasos to the role.

Vasos had previously helmed Dollar General from June 2015 until his retirement and had continued to serve on the retailer’s board.

“The board has tremendous respect for Jeff and greatly appreciates his many contributions to the company, especially during his long tenure leading our retail operations,” Michael Calbert, chairman of Dollar General’s board of directors, said in a statement. “However, at this time, the board has determined that a change in leadership is necessary to restore stability and confidence in the company moving forward.”

Dollar General CEO Todd Vasos / Photo courtesy: Dollar General

In announcing the executive change, Dollar General also lowered its financial forecast for the rest of the fiscal year. The retailer said it now expects net sales growth of 1.5% to 2.5%, compared to previous expectations of growth of 1.3% to 3.3%. It is anticipating flat same-store sales to a decline of 1%, compared to previous guidance calling for a 1% decline to 1% growth.

Related:Shrink, declining discretionary sales lead to rough Q2 for Dollar General

Dollar General’s stock, which had been trading at a 52-week low, jumped 8% in after-hours trading Thursday on news of Vasos’ return.

“I am honored to be rejoining Dollar General at this pivotal time for our company,” Vasos said in a statement. “I look forward to getting back to work with the broader team as we strive to return to a position of operational excellence for our employees and customers and delivery sustainable long-term growth and value creation for our shareholders.”

Vasos is widely credited with growing Dollar General into the country’s largest retailer by store count.

During his seven-year tenure as CEO, Dollar General opened 7,000 stores, increased annual sales revenue by more than 80%, added about 60,000 new jobs and more than doubled its market capitalization to roughly $58 billion, the company noted.

Dollar General operated 19,488 Dollar General, DG Market, DGX and Popshelf stores as of August.

During Vasos’ time as CEO, Dollar General also launched DG Fresh, its self-distribution platform for frozen and refrigerated foods, and also expanded the availability of fresh produce to thousands of stores.

But an inflation-pressured consumer who has pulled back on discretionary purchases has spelled trouble for the discounter in recent quarters.

Related:Dollar General CEO to Retire

In August, the retailer reported its same-store sales declined 0.1% during the second quarter, while operating profit fell 24.2% to $692.3 million.

Dollar General’s grocery sales continue to grow, but the low-margin assortment’s sales weren’t enough to make up for significant shortfalls in discretionary purchases.

“Dollar General has operated from a position of strength for nearly 85 years, and the board believes Todd is the right leader to refocus on the company’s strategic direction and priorities to stabilize the business,” Calbert said.

Vasos came to Dollar General in 2008 as executive vice president, division president and chief merchandising officer and was promoted to chief operating officer in 2013. Previously, he held leadership posts with Longs Drug Stores Corporation, Phar-Mor Food and Drug Inc., and Eckerd Corporation.