Dollar General Corp. reported stronger-than-expected earnings for its fiscal first quarter and raised its full-year guidance, citing improved execution, stronger customer engagement, and resilient demand across its core categories.
The discount retailer said net sales rose 5.3% to $10.44 billion in the quarter ended May 2, up from $9.91 billion a year earlier. Comparable store sales increased 2.4%, driven by a 2.7% rise in average transaction value, although customer traffic dipped slightly.
Dollar General reported net income of $391.9 million, or $1.78 per diluted share, up 7.9% from $363.3 million, or $1.65 a share, a year ago. Operating profit rose 5.5% to $576.1 million.
The company's gross margin expanded 78 basis points to 31.0%, aided by reduced shrinkage and improved inventory markups, partially offset by higher markdowns.
“Our efforts to enhance operational execution and elevate the customer experience are yielding results,” said Chief Executive Todd Vasos. “We’re seeing growth from both core and new customers and making share gains across multiple categories.”
The company posted growth across all merchandise categories:
Consumables: $8.64 billion (up 5.2%)
Seasonal Goods: $1.02 billion (up 6.2%)
Home Products: $507 million (up 5.9%)
Apparel: $269 million (up 3.2%)
Dollar General generated $847.2 million in operating cash flow, a nearly 28% year-over-year increase. The board declared a quarterly cash dividend of $0.59 per share, payable on July 22.
The company opened 156 stores and closed 168, resulting in 20,582 stores at the end of the quarter, a slight decrease from 20,594 at the beginning of the period.
Despite the net decline, Dollar General reaffirmed aggressive growth plans for the year, including:
575 new U.S. stores
Up to 15 new stores in Mexico
2,000 remodels through Project Renovate
2,250 remodels through Project Elevate
45 relocations
A total of 4,885 real estate projects are expected in FY 2025
Citing its strong Q1 performance, the company raised its full-year financial outlook:
Net sales growth: 3.7% to 4.7% (up from 3.4% to 4.4%)
Same-store sales growth: 1.5% to 2.5%
Diluted EPS: $5.20 to $5.80
Capital expenditures: $1.3 billion to $1.4 billion
However, executives flagged tariff-related uncertainty as a potential headwind. The company assumes current tariff rates will remain through mid-August and is preparing for potential increases on Chinese imports later this year.
“While we’re confident in our ability to manage cost pressures,” said Vasos, “uncertainty remains regarding the potential impact of tariffs on consumer behavior in the second half.”
Shares of Dollar General (NYSE: DG) rose in premarket trading on Tuesday following the release.
Check out the full earnings report here - Dollar General First Quarter Financial Report