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Dollar General's Q2 Earnings Beat & Guidance Hike Signal Strong FY25
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Key Takeaways
Dollar General's Q2 earnings and sales beat estimates, with net sales up 5.1% year over year.
Same-store sales rose 2.8%, supported by higher traffic and growth across all major categories.
Management raised FY25 sales, comp and EPS guidance following the better-than-expected quarter.
Dollar General Corporation (DG - Free Report) reported second-quarter fiscal 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year. The company delivered robust same-store sales growth, supported by gains across both consumable and non-consumable categories. The better-than-expected performance and resilient demand from value-seeking consumers prompted management to lift fiscal 2025 guidance.
More on DG Stock’s Q2 Performance
Dollar General posted quarterly earnings of $1.86 per share, which came ahead of the Zacks Consensus Estimate of $1.56. The bottom line increased 9.4% from $1.70 in the prior-year period.
Net sales of $10,727.7 million rose 5.1% year over year and surpassed the Zacks Consensus Estimate of $10,678 million. This increase was primarily driven by contributions from store openings and growth in same-store sales, though partially offset by the impact of store closures.
Same-store sales grew 2.8%, reflecting a 1.5% increase in customer traffic and a 1.2% jump in the average transaction amount. Growth was recorded across all major categories, including consumables, seasonal, home products and apparel. We had anticipated same-store sales growth of 2.6% for the quarter.
Dollar General Corporation Price, Consensus and EPS Surprise
DG’s consumables category saw an increase of 5%, reaching $8,819.9 million. Net sales for the seasonal category totaled $1,106.1 million, a surge of 4.9% from the year-ago period. Home products sales grew 6.6% to $511.8 million, and apparel saw an increase of 4.2%, reaching $289.9 million.
The gross margin expanded 137 basis points to 31.3%, primarily benefiting from lower shrink, higher inventory markups and reduced inventory damages. These gains were partially offset by a higher LIFO provision, increased markdowns and elevated distribution costs. We had envisioned a 50-basis-point increase in the gross margin.
SG&A expenses, as a percentage of net sales, rose by 121 basis points to 25.8% in the quarter. The increase was caused by higher incentive compensation, repairs and maintenance and benefits. We anticipated 110 basis points of deleverage in SG&A expenses.
Dollar General’s operating profit surged 8.3% year over year to $595.4 million.
Dollar General’s Store Expansion & Remodeling Plans
During the quarter, Dollar General opened 204 new stores, remodeled 729 stores through Project Elevate and 592 stores through Project Renovate, and relocated 15 stores.
The company reaffirmed its fiscal 2025 real estate strategy, which includes about 4,885 projects. Plans call for opening roughly 575 new U.S. stores and up to 15 in Mexico, remodeling around 2,000 locations under Project Renovate and about 2,250 under Project Elevate, as well as relocating approximately 45 stores.
DG’s Financial Snapshot
This Goodlettsville, TN-based company ended the quarter with cash and cash equivalents of $1,284.6 million, long-term obligations of $5,725.8 million and total shareholders’ equity of $8,012.1 million. Management incurred capital expenditures of $694 million in the 26 weeks ended Aug. 1, 2025. For fiscal 2025, Dollar General continues to anticipate capital expenditures in the band of $1.3-$1.4 billion. The company does not plan to repurchase shares in fiscal 2025.
What to Expect From Dollar General in FY25?
Dollar General now expects net sales growth of 4.3% to 4.8%, up from its prior outlook of 3.7% to 4.7%. Same-store sales are projected to increase 2.1% to 2.6%, up from the earlier range of 1.5%-2.5%. Earnings per share are anticipated to be between $5.80 and $6.30 compared with the previous estimate of $5.20 to $5.80.
Shares of this Zacks Rank #3 (Hold) company have risen 14.6% in the past three months compared with the industry’s growth of 0.2%.
The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and EPS calls for growth of 3.1% and 10.9%, respectively, from the year-ago reported numbers.
The Chefs' Warehouse, Inc. (CHEF - Free Report) , a premier distributor of specialty food products in the United States, currently carries a Zacks Rank #2 (Buy). CHEF has a trailing four-quarter earnings surprise of 11.3%, on average.
The Zacks Consensus Estimate for CHEF’s current financial-year sales and earnings suggests growth of 6.4% and 19.1%, respectively, from the year-ago reported numbers.
Grocery Outlet Holding Corp. (GO - Free Report) , an extreme value retailer of quality, name-brand consumables and fresh products, carries a Zacks Rank #2. GO has a trailing four-quarter earnings surprise of 28.2%, on average.
The Zacks Consensus Estimate for Grocery Outlet’s current fiscal-year sales indicates growth of 8.3% from the year-ago period’s reported figures.
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Dollar General's Q2 Earnings Beat & Guidance Hike Signal Strong FY25
Key Takeaways
Dollar General Corporation (DG - Free Report) reported second-quarter fiscal 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year. The company delivered robust same-store sales growth, supported by gains across both consumable and non-consumable categories. The better-than-expected performance and resilient demand from value-seeking consumers prompted management to lift fiscal 2025 guidance.
More on DG Stock’s Q2 Performance
Dollar General posted quarterly earnings of $1.86 per share, which came ahead of the Zacks Consensus Estimate of $1.56. The bottom line increased 9.4% from $1.70 in the prior-year period.
Net sales of $10,727.7 million rose 5.1% year over year and surpassed the Zacks Consensus Estimate of $10,678 million. This increase was primarily driven by contributions from store openings and growth in same-store sales, though partially offset by the impact of store closures.
Same-store sales grew 2.8%, reflecting a 1.5% increase in customer traffic and a 1.2% jump in the average transaction amount. Growth was recorded across all major categories, including consumables, seasonal, home products and apparel. We had anticipated same-store sales growth of 2.6% for the quarter.
Dollar General Corporation Price, Consensus and EPS Surprise
Dollar General Corporation price-consensus-eps-surprise-chart | Dollar General Corporation Quote
DG’s Key Metrics & Margin Insights
DG’s consumables category saw an increase of 5%, reaching $8,819.9 million. Net sales for the seasonal category totaled $1,106.1 million, a surge of 4.9% from the year-ago period. Home products sales grew 6.6% to $511.8 million, and apparel saw an increase of 4.2%, reaching $289.9 million.
The gross margin expanded 137 basis points to 31.3%, primarily benefiting from lower shrink, higher inventory markups and reduced inventory damages. These gains were partially offset by a higher LIFO provision, increased markdowns and elevated distribution costs. We had envisioned a 50-basis-point increase in the gross margin.
SG&A expenses, as a percentage of net sales, rose by 121 basis points to 25.8% in the quarter. The increase was caused by higher incentive compensation, repairs and maintenance and benefits. We anticipated 110 basis points of deleverage in SG&A expenses.
Dollar General’s operating profit surged 8.3% year over year to $595.4 million.
Dollar General’s Store Expansion & Remodeling Plans
During the quarter, Dollar General opened 204 new stores, remodeled 729 stores through Project Elevate and 592 stores through Project Renovate, and relocated 15 stores.
The company reaffirmed its fiscal 2025 real estate strategy, which includes about 4,885 projects. Plans call for opening roughly 575 new U.S. stores and up to 15 in Mexico, remodeling around 2,000 locations under Project Renovate and about 2,250 under Project Elevate, as well as relocating approximately 45 stores.
DG’s Financial Snapshot
This Goodlettsville, TN-based company ended the quarter with cash and cash equivalents of $1,284.6 million, long-term obligations of $5,725.8 million and total shareholders’ equity of $8,012.1 million. Management incurred capital expenditures of $694 million in the 26 weeks ended Aug. 1, 2025. For fiscal 2025, Dollar General continues to anticipate capital expenditures in the band of $1.3-$1.4 billion. The company does not plan to repurchase shares in fiscal 2025.
What to Expect From Dollar General in FY25?
Dollar General now expects net sales growth of 4.3% to 4.8%, up from its prior outlook of 3.7% to 4.7%. Same-store sales are projected to increase 2.1% to 2.6%, up from the earlier range of 1.5%-2.5%. Earnings per share are anticipated to be between $5.80 and $6.30 compared with the previous estimate of $5.20 to $5.80.
Shares of this Zacks Rank #3 (Hold) company have risen 14.6% in the past three months compared with the industry’s growth of 0.2%.
3 Key Picks
Post Holdings, Inc. (POST - Free Report) , a consumer-packaged goods holding company, currently sports a Zacks Rank #1 (Strong Buy). POST has a trailing four-quarter earnings surprise of 21.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and EPS calls for growth of 3.1% and 10.9%, respectively, from the year-ago reported numbers.
The Chefs' Warehouse, Inc. (CHEF - Free Report) , a premier distributor of specialty food products in the United States, currently carries a Zacks Rank #2 (Buy). CHEF has a trailing four-quarter earnings surprise of 11.3%, on average.
The Zacks Consensus Estimate for CHEF’s current financial-year sales and earnings suggests growth of 6.4% and 19.1%, respectively, from the year-ago reported numbers.
Grocery Outlet Holding Corp. (GO - Free Report) , an extreme value retailer of quality, name-brand consumables and fresh products, carries a Zacks Rank #2. GO has a trailing four-quarter earnings surprise of 28.2%, on average.
The Zacks Consensus Estimate for Grocery Outlet’s current fiscal-year sales indicates growth of 8.3% from the year-ago period’s reported figures.