Shares of Dollar General surged nearly 16% on Tuesday after the retailer raised its full-year forecast, driven by better-than-expected first-quarter results and a growing customer base that now includes more middle- and upper-income shoppers.
The discount chain posted strong earnings and revenue, despite broader industry concerns over U.S. tariff hikes. Dollar General now expects net sales growth of 3.7% to 4.7%, up from its earlier guidance of 3.4% to 4.4%. Projected earnings per share have also been raised to a range of $5.20 to $5.80.
“We’re seeing customers across multiple income bands seeking value,” said CEO Todd Vasos on Tuesday’s earnings call. “Our performance reflects that expanded appeal.”
Earnings Top Estimates
For the quarter ending May 2, Dollar General reported:
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Earnings per share: $1.78 (vs. $1.48 expected)
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Revenue: $10.44 billion (vs. $10.31 billion expected)
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Net income: $391.93 million, up from $363.32 million year-over-year
Same-store sales rose by 1.5% to 2.5%, exceeding the prior range of 1.2% to 2.2%. While customer traffic dipped slightly by 0.3%, average transaction value increased 2.7%, with solid gains in food, seasonal, home, and apparel categories.
Navigating Tariff Challenges
Vasos said the company continues to reduce exposure to China and limit price hikes amid the evolving tariff landscape. Direct imports now make up a mid- to high single-digit percentage of overall purchases, with indirect imports roughly double that.
“Tariffs may lead to some price increases as a last resort,” Vasos said. “But we’re working hard with suppliers and product sourcing strategies to minimize that impact.”
CFO Kelly Dilts added that the company’s full-year guidance accounts for tariff-related pressures, while allowing room for continued volatility in consumer spending.
Winning Over New Shoppers
While Dollar General’s core base remains budget-conscious—60% of sales come from households earning less than $30,000 annually—the company is increasingly attracting higher-income demographics.
Recent surveys by the retailer revealed that nearly 25% of core customers have seen their income drop in the past year, with 60% saying they expect to sacrifice necessities in the months ahead.
“Despite these constraints, we’re encouraged by the growing number of middle- and upper-income customers shopping with us more often,” Vasos said.
Growth Beyond Essentials
Dollar General has also expanded beyond staple products by bolstering its discretionary merchandise categories. Home décor, seasonal items, and apparel contributed to the strong sales growth, especially among newer customer segments.
Its emerging Popshelf store concept—geared toward higher-income consumers and focused on discretionary items like toys, beauty, and party supplies—also performed well. While exact sales figures were not disclosed, Vasos confirmed strong same-store sales growth for the brand.
Enhancing Operations and Delivery
As part of ongoing operational improvements, Dollar General:
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Removed over 1,000 slow-selling items to focus on in-demand stock
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Launched a home delivery service, now operating in over 3,000 stores
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Grew DoorDash sales by over 50% year-over-year
The company is also addressing past safety concerns. It has reduced employee turnover and invested in improving store conditions after previous fines from the U.S. Department of Labor.
Market Performance
Dollar General stock closed at $112.57 on Tuesday, bringing its market capitalization to $24.76 billion. Year-to-date, the stock is up 48%, far outperforming the S&P 500, which has gained just 1% in the same period.
