TLDR
- Q1 EPS came in at $1.78 vs. $1.48 expected; revenue hit $10.44B vs. $10.31B forecast
- Same-store sales rose 2.4%, driven by higher transaction size despite a 0.3% traffic dip
- CEO highlighted gains among middle- and upper-income shoppers
- FY25 guidance raised: sales growth of 3.7%-4.7%, EPS of $5.20–$5.80
- Shares up over 12% on the day but remain down ~49% over 3 years
Dollar General Corporation (NYSE: DG) reported a better-than-expected Q1 for fiscal year 2025, sending shares soaring over 12% to $109 by midday on June 3.
The discount retailer posted diluted EPS of $1.78, up 7.9% year-over-year and well above analysts’ forecast of $1.48. Revenue rose 5.3% to $10.44 billion, also beating consensus estimates of $10.31 billion.
Same-store sales increased 2.4%, fueled by a 2.7% rise in average transaction size, despite a slight 0.3% drop in customer traffic. The company saw sales growth across all key categories, including consumables, seasonal items, home goods, and apparel.
$DG shares are up over 12% as the company posted better-than-expected first-quarter results and raised its full-year outlook, despite uncertainty stoked by trade policies.
More middle- and higher-income Americans are shopping at Dollar General as they look to save money. “Our… pic.twitter.com/8V1HHlx6Wf
— Schwab Network (@SchwabNetwork) June 3, 2025
Higher-Income Shoppers Drive Growth
CEO Todd Vasos attributed the strong results to improved execution, cost control, and a broader customer base. He highlighted market share gains in both core and “trade-in” customers, noting that more middle- and higher-income consumers are turning to Dollar General amid inflation and tariff concerns.
While the company’s traditional base remains economically constrained—25% of customers report earning less than last year—its value proposition has attracted a wider demographic. Vasos said this trend was evident both in-store and via market research.
Tariff Risks Loom, But Mitigation In Place
Dollar General acknowledged ongoing uncertainty around U.S.–China tariffs but said it has taken steps to reduce exposure. The company has diversified its sourcing, collaborated with vendors to lower costs, and substituted products to avoid sharp price increases.
CFO Kelly Dilts said the full-year outlook factors in potential consumer spending pressure but expects to offset most of the direct tariff impact on gross margins.
Raised Full-Year Guidance
Reflecting its Q1 outperformance, Dollar General raised its full-year forecast. It now expects:
- Net sales growth of 3.7% to 4.7% (previously 3.4% to 4.4%)
- Same-store sales growth of 1.5% to 2.5% (up from 1.2% to 2.2%)
- EPS between $5.20 and $5.80 (up from $5.10 to $5.80)
Dollar General $DG Q1 2025 Earnings
– Revenue: $10.4B, up 5.3%
– Same-store sales: +2.4%
– EPS: $1.78, up 7.9%
– Net income: $391.9M
– Operating income: $576.1M, up 5.5%
– FCF: $847M, up 27.6%
– Inventories down 7% per storeRaised FY25 guidance:
– EPS now $5.20–$5.80
– SSS:… pic.twitter.com/SaR4MWXqSz— MLQ.ai (@mlqai) June 3, 2025
Capital expenditures are projected to remain between $1.3 billion and $1.4 billion, with plans for 4,885 real estate projects, including 575 new stores and nearly 4,300 remodels.
Stock Performance and Outlook
Despite today’s rally, Dollar General’s longer-term returns lag badly. As of June 3:
- YTD return: +45.94%
- 1-year return: -19.79%
- 3-year return: -49.34%
- 5-year return: -38.46%
For context, the S&P 500 is up 1.38% YTD and nearly 91% over five years.
The sharp rebound suggests improving investor sentiment, especially as Dollar General expands its Popshelf format aimed at higher-income shoppers and scales its delivery services through DoorDash and in-house solutions.
