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March 12 (Reuters) - Dollar General DG.N forecast annual comparable sales below Wall Street estimates on Thursday, as bargain-hunting customers turn to other discount stores and online retailers for better deals amid economic uncertainty.

Its shares, which rose more than 75% in 2025, were down about 5% in premarket trading even though the company beat estimates for the holiday quarter.

Increasing costs of living and signs of deteriorating labor market conditions are making consumers, especially from lower-income groups, hesitant to shop for nice-to-have items, in turn hurting sales at retailers.

The U.S. unemployment rate rose 4.4% in February, from 4.3% in January. Consumer prices also likely accelerated in February, fueled by tariffs and a rise in the cost of gasoline and oil due to tensions in the Middle East.

The company expects fiscal 2026 same-store sales to grow in the range of 2.2% to 2.7%, compared with analysts' estimates of 2.48%, according to data compiled by LSEG.

The midpoint of its annual profit forecast range of $7.10 to $7.35 per share was largely in line with estimates of $7.21 per share.

Dollar General has been contending with stiff competition from retail behemoth Walmart and e-commerce giant Amazon.com AMZN.O, which have managed to win over value-seeking customers.

Walmart WMT.N, which saw online sales increasingly driven by higher‑income shoppers, maintained a cautious full‑year outlook even after reporting fourth-quarter sales ahead of estimates.

However, Dollar General's efforts to offer the majority of its products at or below $1, coupled with attractive holiday deals, helped in beating sales and profit estimates during the quarter.

The company reported fourth-quarter same-store sales growth of 4.3%, compared with analysts' estimates of 3.34%.

It earned a quarterly profit of $1.93 per share, above estimates of $1.65 per share.

Rival Dollar Tree DLTR.O is scheduled to report earnings next week