Dollar General sees ‘tougher’ comparison in Q4 on gross margin front

Asked on Dollar General’s (DG) earnings call about gross margin in the second quarter, a potential step down in Q3 and “any reason why it should step down more than expected seasonally,” executives replied, according to a transcript: “So I’ll answer the gross margin question first. What we’re seeing now is obviously just an outperformance on shrink. So 108 basis points this quarter of the 137 basis points improvement. As we think about cadence for the back half, we’re certainly expecting a year over year improvement in both of the quarters. But what I would tell you is we actually have tougher laps in Q4 on the gross margin front. And so we would expect maybe a little bit less on Q4 as far as improvement over year over year. And then you didn’t ask about SG&A, but I do want to call out just one thing on the SG&A front. We would expect more pressure in SG&A in third quarter, and that’s really around repairs and maintenance. It’s kind of the season for repairs and maintenance.”