Dollar General reported strong earnings for the first quarter, with net sales climbing over 5% to $10.4 billion compared to the same period last year. Same-store sales also rose more than 2%, a key metric in the retail industry. The company’s profitability improved as well, with GAAP net income increasing nearly 8% to just under $392 million.
Earnings per share came in at $1.78, beating analyst estimates of $1.46. Revenue also surpassed expectations of $10.25 billion. Following the impressive results, several analysts upgraded their outlook on Dollar General.
Rupesh Parikh from Oppenheimer raised the stock to an “overperform” rating with a price target of $130 per share, up from a “perform” rating. Parikh noted Dollar General’s consistent comparable sales growth and its appeal in a potential recession. Dollar General’s CEO Todd Vasos said the company is starting to attract more affluent customers looking for value.
However, its core lower-income customer base is still facing pressure.
Earnings surge for Dollar General
The retailer plans to minimize the impact of tariffs by working with vendors, shifting manufacturing, and adjusting product offerings, without raising prices if possible.
For the full year, Dollar General raised its guidance. It now expects revenue growth of 3.7% to 4.7%, up from 3.4% to 4.4% previously. Same-store sales are projected to increase 1.5% to 2.5%, compared to the prior forecast of 1.2% to 2.2%.
The company also raised the low end of its earnings per share outlook to a range of $5.20 to $5.80. Dollar General’s stock has surged nearly 50% year-to-date, far outpacing the S&P 500’s roughly 1% gain. Shares closed at $112.57 on Tuesday, giving the retailer a market value of $24.76 billion.
The company is expanding its customer base and seeing growth across various categories like food, seasonal items, home goods, and apparel. It is also addressing operational challenges and expanding delivery services. Dollar General’s new concept store Popshelf, which targets higher-income consumers, has shown strong same-store sales growth.
