Dollar General brought back former chief Todd Vasos to replace CEO Jeffery Owen less than a year after his appointment, sending the company's shares up nearly 7% in trading after the bell on Thursday.

The discount retailer expects the change "to restore stability and confidence" in the company, which has lost more than half its value so far this year, hurt by dipping margins due to weak customer traffic and a shift to lower-margin goods.

In August, the company forecast a steep drop in annual profit and missed market expectations for second-quarter results.

During Vasos' earlier stint between June 2015 and November 2022, the company's annual revenue had risen more than 80% and about 7,000 more stores were added to the retailer's footprint.

Vasos "is acutely aware of the challenges facing our business and the industry more broadly" Dollar General said, adding his appointment was effective immediately.

The discount store chain on Thursday also cut its 2023 profit forecast for a third time this year and now expects a decline between 29% and 34%, compared with the previous range of a 22% to 34% decline.

It tightened the range of its annual net sales growth outlook to 1.5% to 2.5%, from a prior range of 1.3% to 3.3% growth.

(Reporting by Savyata Mishra in Bengaluru; Editing by Maju Samuel and Shinjini Ganguli)