Shares of Dollar General, the popular retail chain, took a nosedive on Thursday following the release of the company's second-quarter financial results for 2024. The stock plummeted by 30% and reached a trading value below $87, its lowest point since 2017. Investors seemed disappointed with Dollar General's downward revised full-year financial guidance, along with concerns over its struggle to stimulate sales and manage inventory effectively.

Dollar General had initially projected a growth rate of 6% to 6.7% for net sales in 2024. However, the updated forecast now anticipates growth of only 4.6% to 5.3%. While seemingly small, the revision significantly affects a company that boasts nearly $40 billion in annual sales. Additionally, Dollar General's profitability has taken a hit, with projected earnings per share (EPS) for 2024 dropping to a range of $5.50 to $6.20, starkly contrasting the $10.68 EPS achieved in 2022.

The retail giant has been grappling with various challenges on both the profit and sales fronts. On one hand, Dollar General continues to face issues with inventory management, as damaged merchandise, theft, and increased discounts have impacted profitability. However, management is actively implementing changes to rectify these concerns, albeit with the possibility of a few more quarters before substantial improvements are seen.

On the other hand, Dollar General's primary customer base consisting of lower-income consumers has been disproportionately affected by inflation, leading to financial strain and reduced spending power. This has resulted in lower sales for the retail chain.

While the stock turbulence has caused some investors to abandon ship, others see an opportunity for a potential long-term investment. With Dollar General currently trading at an attractive valuation, those who believe in the company's ability to overcome its headwinds view the current situation as a favorable entry point.

It remains to be seen whether Dollar General can successfully address its ongoing challenges and regain investor confidence. As the company navigates through its troubled waters, future financial results and strategic initiatives will play a crucial role in determining the trajectory of the stock's performance.

Disclaimer: The views expressed in this article are the opinions of the author, Jon Quast, who holds positions in Dollar General. The Motley Fool has no position in any of the stocks mentioned and abides by a disclosure policy.