Dollar General has brought back its former chief executive in an attempt to revive its struggling business.
On Thursday, the discount chain announced that it had reinstated Todd Vasos as CEO, replacing Jeff Owen. Vasos had previously served in the role for seven years before he retired in 2022.
The replacement is effective immediately, the company said. Owen was CEO for less than one year.
"At this time the Board has determined that a change in leadership is necessary to restore stability and confidence in the Company moving forward," said Michael Calbert, the chair of Dollar General's board of directors, in a statement.
Shares of Dollar General, which have been under pressure this year, surged in after-hours trading Thursday after the announcement.
Dollar General has faced slowing growth since Owen took over as chief executive last November. In August, the company slashed its sales and profit outlook for the year, blaming weaker consumer spending and increasing theft. Earlier this year, workers also protested a pattern of federal safety violations and violent incidents at the chain.
External economic factors may have contributed to the discount chain's downtrend as well.
Neil Saunders, retail analyst and managing director at GlobalData, told CNN that Dollar General's slowdown was partially attributed to its customer base feeling the pressure of higher costs of living.
"This has been exacerbated by cuts in SNAP payments as temporary pandemic benefits came to an end. As a result, lower-income shoppers are cutting back on non-consumable and indulgent purchases from the chain in a bid to save money," he said.
Wall Street seemed to lose faith in Owen's leadership. Earlier this year Dollar General workers protested over unsafe working conditions at the store.. The retailer's stock has fallen nearly 60% since the start of this year.
Conversely, during Vasos' seven years as CEO, Dollar General more than doubled its market capitalization. The company also expanded its store base by approximately 7,000 and increased annual sales by more than 80% during that time.
In a statement, Vasos said his aim was to return the retailer to a position of strength.
"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 deliver sustainable long-term growth and value creation for our shareholders," he said.
At least one Wall Street analyst applauded the leadership shakeup. Oppenheimer senior analyst Rupesh Parikh called the change "surprising," but said it "could help to re-instill confidence" in the retailer.