Shares of Dollar General (NYSE: DG) plummeted 30% Thursday after the discount retailer announced lower than expected earnings and cut its sales outlook for the full year, saying its customers were cash strapped.

The company’s stock was down nearly $37 per share in midday trading—and the spillover effect to competitors was significant, with Dollar Tree falling roughly 10% as well.

Dollar General, on Thursday, reported net income for the second quarter fell to $374.2 million, or $1.70 a share. (Analysts were expecting $1.79 per share.) For the full year of fiscal 2024, the company cut its guidance range for earnings to between $5.50 and $6.20 per share, down from a previous range of $6.80 to $7.55. Net sales growth and same-store sales targets were also lowered.

The company blamed the earnings shortfall on the current economic state, saying its customer base, which is largely lower-income, is struggling to make ends meet, even at deep discount retail stores.

“While we believe the softer sales trends are partially attributable to a core customer who feels financially constrained, we know the importance of controlling what we can control,” said CEO Todd Vasos in a statement.

Analysts say there is some truth in that, but it’s likely not the sole reason for the disappointing numbers at Dollar General. The company itself conceded it needed to improve how it handles inventory, which could lower losses, and that stores needed improvements.

Another factor, says Joe Feldman, senior managing director and assistant director of research at Telsey Advisor Group, is the customer base.

“What’s different from prior economic periods where consumers are under duress is we’re not seeing the trade-down customer [more affluent shoppers who would visit Dollar General to purchase lower-priced items] as much as we have in the past,” he told Fast Company. “That customer is shopping at Walmart and online more frequently. There are a lot of other places now that the middle- to slightly-more-affluent consumer can shop at, and I think that’s what’s driving the pressure.”

Walmart, in its most recent quarterly earnings, reported strong growth in revenue and operating income—and raised its guidance for the coming fiscal year. Target saw its profit increase 36% in its latest earnings report. Both have been lowering prices to lure in customers. (Dollar General, on its earnings call with analysts, said it has been increasing its level of promotional activity as well.)

Vasos, in an earnings call, argued that middle- and higher-income households might be seeking value, but weren’t feeling the same pressures.

“I want to provide some additional context around what we’re seeing and hearing from our customers,” he said. “The majority of them state that they feel worse off financially than they were six months ago as higher prices, softer employment levels, and increased borrowing costs have negatively impacted low-income consumer sentiment.”

Other analysts, on the call, theorized that Dollar General’s “small-box” model (versus a big-box store like Walmart) could be part of the problem, due to the costs associated with running its sheer number of stores (more than 20,000 nationwide) and the brand’s limited online presence.

Vasos defended the model, saying “this company and the small box in general is very much alive and well. We’re just going through a little bit of a transition period and a transformation. And it’s never usually a straight line to the top when you do these.”

The core Dollar General customer earns less than $35,000 per year. That demographic is responsible for 60% of the company’s overall sales, Vasos said. And, at present those customers are focused on needs, such as food, rather than small luxuries, which also impacted sales.

The company did note that retail theft continued to be a problem though was in-line with expectations. It also said recent efforts to curb that, such as its decision to completely remove the self-checkout stations in 300 locations and convert some of the registers in another 9,000 stores, was having a positive impact on those losses.

That didn’t calm investors, though. The stock has traded in the mid-$80 range through most of the day. If the company closes below $100 Thursday, it will be the first time it has done so since 2018.