Dollar General Boosts FY25 Outlook As Q1 Results Top Estimates; Stock Up 9%

Dollar General Corporation

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(RTTNews) - Discount retailer Dollar General Corp. (DG) reported on Tuesday that net profit for the first quarter grew 7.9 percent from last year, drive by improved gross margins and sales growth across categories. Both adjusted earnings per share and quarterly net sales topped analysts' estimates. The company also raised its outlook for the full-year 2025.

In pre-market activity on the NYSE, Dollar General shares are surging $9.15 or 9.42 percent to trade at $106.25.

"We are pleased with our start to the year, including strong same-store sales and EPS results. Our efforts to improve execution and enhance the associate and customer experience are yielding positive outcomes in both our operational performance and our financial results," said Todd Vasos, Dollar General's chief executive officer.

For the first quarter, the variety stores chain reported net income of $391.93 million or $1.78 per share, up from $363.32 million or $1.65 per share in the prior-quarter.

On average, 25 analysts polled expected the company to report earnings of $1.49 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 5.3 percent to $10.44 billion from $9.91 billion in the same quarter last year. Analysts expected net sales of $10.29 billion for the quarter.

The company noted that had market share gains in sales of both consumables and non-consumables, and saw growth with both core customer and trade-in customers during the quarter.

The company said net sales growth was driven by positive sales contributions from new stores and growth in same-store sales, partially offset by the impact of store closures.

Same-store sales increased 2.4 percent, reflecting a 2.7 percent increase in average transaction amount and a 0.3 percent decrease in customer traffic.

Gross margin increased 78 basis points to 31.0 percent, driven primarily by lower shrink and higher inventory markups, partially offset by increased markdowns.

Looking ahead fiscal 2025, the company now projects earnings in a range of $5.20 to $5.80 per share on net sales growth of 3.7 to 4.7 percent, with same-store sales growth of 1.5 to 2.5 percent.

Previously, the company expected earnings in the range of $5.10 to $5.80 per share on net sales growth of 3.4 to 4.4 percent, with same-store sales growth of 1.2 to 2.2 percent.

The Street is looking for earnings of $5.61 per share on net sales growth of 3.92 percent to $42.21 billion for the year.

The company continues to expect capital expenditures, including those related to investments in the company's strategic initiatives, in the range of $1.3 billion to $1.4 billion.

The Company is also reiterating its plans to execute approximately 4,885 real estate projects in fiscal year 2025, including opening approximately 575 new stores in the U.S. and up to 15 new stores in Mexico, remodeling approximately 2,000 stores through Project Renovate, remodeling approximately 2,250 stores through Project Elevate, and relocating approximately 45 stores.

On Monday, the Company's Board of Directors declared a quarterly cash dividend of $0.59 per share on the Company's common stock, payable on or before July 22, 2025, to shareholders of record on July 8, 2025.

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