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Investors Question Impact of “Project Elevate” on Dollar General (NYSE:DG) Locations

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Dollar General’s Project Elevate is moving along, though investors question its value. Meanwhile, Dollar General is actively cutting prices.

Investors Question Impact of “Project Elevate” on Dollar General (NYSE:DG) Locations

Discount retail giant Dollar General (DG) knows that it is in a good position right now. With economic uncertainty and still-high inflation hitting shoppers in the wallet, it is a great time to offer products at discounting prices. Since that is Dollar General’s bread and butter, the result is good news overall. And Dollar General’s “Project Elevate” looks to take fuller advantage of market conditions. But investors are less sure, and Dollar General stock is down nearly 2% in Tuesday afternoon’s trading.

Elevate Your Investing Strategy:

So far, Dollar General has been prosecuting Project Elevate briskly, having completed 668 remodels in the first quarter. This is slightly ahead of schedule; Dollar General looks to complete close to 2,250 such remodels over the course of fiscal year 2025, and it is already nearly a third of the way there. Remodels under Project Elevate, reports note, look to offer better product mixes as well as an improved customer experience.

Project Elevate, reports note, represents a kind of intermediate step between “do nothing” and “full renovation.” Since a Project Elevate renovation works on about 80% of the store footprint, and is not as comprehensive as a full renovation, the result is a much more cost-efficient renovation than the complete alternative. With these renovations, Dollar General looks to produce an improvement in same-store sales of between 3% and 5%.

Even Bigger Bargains

For those who believe that even dollar store prices are a bit too high these days, there is relief on the horizon. Dollar General is planning to pare back prices on over 1,000 items nationwide, with a particular focus on summer-themed items.

Most savings started back around June 27, but reports note the discounts will continue through to Labor Day, the unofficial end of summer. And, since most of the products in question are summer-themed—like party supplies, cleaning supplies, and more—the end result is more rapid turnover and less overhang at the end of the summer that ends up as discount fodder.

Is Dollar General Stock a Buy?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on DG stock based on nine Buys and 13 Holds assigned in the past three months, as indicated by the graphic below. After a 9.98% loss in its share price over the past year, the average DG price target of $116.48 per share implies 2.63% upside from current levels.

See more DG analyst ratings

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