Shares of Dollar General (DG) jumped nearly 7% in premarket trading on Thursday after the discount retailer beat Wall Street’s second-quarter expectations. The company also raised its full-year sales and profit outlook, supported by resilient demand across U.S. income groups despite tariff and inflation concerns.
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Dollar General Posts Strong Q2 Numbers
In the second quarter, Dollar General reported earnings per share (EPS) of $1.86, topping analyst estimates of $1.57. Meanwhile, revenue grew 5.1% year-over-year to $10.73 billion, slightly above the consensus estimate of $10.68 billion.
Furthermore, operating profit increased 8.3% to $595.4 million in Q2.
Dollar General Raises Annual Outlook on Strong Demand
Following stronger-than-expected second-quarter results, Dollar General raised its full-year guidance. The company also noted earlier this year that its value-focused assortment has been drawing in higher-income shoppers, in addition to its core lower-income customer base.
Consequently, the retailer now projects earnings of $5.80 to $6.30 per share, compared with its prior outlook of $5.20 to $5.80. Net sales are expected to grow 4.3% to 4.8%, up from 3.7% to 4.7%, while same-store sales are seen rising 2.1% to 2.6%, versus a previous forecast of 1.5% to 2.5%.
Overall, Dollar stores have historically performed well during economic downturns, as budget-conscious shoppers rely on them for affordable essentials.
Is Dollar General a Buy or Sell?
According to TipRanks, Wall Street has a Moderate Buy consensus rating on DG stock, based on nine Buys and 13 Holds assigned in the last three months. The average Dollar General stock price target of $119.50, which is 7.5% above the current price level.
