Dollar General stock gains on strong earnings beat, raised guidance

Investing.com -- Dollar General Corporation (NYSE: DG) shares jumped 3.8% premarket after the discount retailer reported third-quarter earnings that significantly exceeded analyst expectations and raised its full-year outlook.

The company posted adjusted earnings per share of $1.28 for the third quarter, handily beating the analyst consensus of $0.94. Revenue came in at $10.6 billion, slightly below the consensus estimate of $10.62 billion but representing a 4.6% increase compared to the same quarter last year.

Same-store sales rose 2.5% YoY, driven by a 2.5% increase in customer traffic, while the average transaction amount remained flat. The company saw growth across all merchandise categories, including consumables, seasonal, home products, and apparel.

"These results were highlighted by EPS growth of 44%, strong operating margin performance, and balanced sales growth, including market share gains across both consumable and non-consumable categories," said Todd Vasos, Dollar General’s chief executive officer.

Dollar General’s operating profit surged 31.5% to $425.9 million compared to the same period last year, while gross profit margin improved by 107 basis points to 29.9%.

The company raised its full-year guidance, now expecting earnings per share between $6.30 and $6.50, above the analyst consensus of $6.13. It also increased its net sales growth forecast to approximately 4.7% to 4.9%, up from its previous expectation of 4.3% to 4.8%.

Additionally, Dollar General announced its fiscal year 2026 real estate growth plans, which include approximately 450 new stores in the U.S., 10 new stores in Mexico, and remodeling about 4,250 existing locations.

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