Dollar General Delivers Q3 Earnings Beat, Lifts Full-Year Outlook

Dollar General Corporation DG reported third-quarter fiscal 2025 results, wherein both the top and bottom lines beat the Zacks Consensus Estimate and increased year over year, marking continued operational progress and healthy customer traffic trends. The company delivered steady same-store sales growth, supported by gains across both consumable and non-consumable categories. The better-than-expected performance and resilient demand from value-seeking consumers prompted management to lift its fiscal 2025 guidance.

More on DG Stock’s Q3 Performance

Dollar General posted quarterly earnings of $1.28 per share, which came ahead of the Zacks Consensus Estimate of 92 cents. The bottom line increased 43.8% from 89 cents in the prior-year period. 

Net sales of $10,649.5 million rose 4.6% year over year and came ahead of the Zacks Consensus Estimate of $10,614 million. This increase was primarily driven by contributions from store openings and growth in same-store sales, though partially offset by the impact of store closures.

Same-store sales grew 2.5%, reflecting a 2.5% increase in customer traffic and a flat average transaction amount. Growth was recorded across all major categories, including consumables, seasonal, home products and apparel. We had anticipated same-store sales growth of 2.3% for the quarter.

Dollar General Corporation Price, Consensus and EPS Surprise

Dollar General Corporation price-consensus-eps-surprise-chart | Dollar General Corporation Quote

DG’s Key Metrics & Margin Insights

DG’s consumables category generated $8,824.6 million, up 4.5% from the prior year. Seasonal sales increased 5.5% to $992.2 million, home products rose 5.4% to $550.7 million, and apparel improved 2.4% to $281.9 million.

Gross margin expanded 107 basis points to 29.9%, benefiting from higher inventory markups and reduced shrink, partially offset by a higher LIFO charge. We had envisioned an 80-basis-point increase in gross margin.

SG&A expenses, as a percentage of sales, deleveraged 25 basis points to 25.9%, stemming from higher incentive compensation, repairs and maintenance, and utilities. We anticipated 90 basis points of deleverage in SG&A expenses.
Dollar General’s operating profit jumped 31.5% to $425.9 million, reflecting margin recovery and a healthier category mix.

Dollar General’s Store Expansion & Remodeling Plans

Dollar General continued to advance its strategic real estate initiatives, maintaining a disciplined approach across new store openings and remodel activity. The company opened 196 new stores, reflecting its ongoing push to expand market reach. Store upgrades also remained a priority, with 651 locations remodeled under Project Elevate and 524 stores refreshed through Project Renovate. Additionally, the company relocated eight stores during the period.

The company reaffirmed its fiscal 2025 real estate strategy, which includes about 4,885 projects. Plans call for opening roughly 575 new U.S. stores and up to 15 in Mexico, remodeling around 2,000 locations under Project Renovate and about 2,250 under Project Elevate, as well as relocating approximately 45 stores.

Dollar General also outlined its fiscal 2026 real estate growth strategy, with plans to execute about 4,730 real estate projects. This includes opening about 450 new U.S. stores and roughly 10 new locations in Mexico. DG also expects to fully remodel around 2,000 stores through Project Renovate and refresh approximately 2,250 locations under Project Elevate. Additionally, the company intends to relocate about 20 stores.

DG’s Financial Snapshot

This Goodlettsville, TN-based company ended the quarter with cash and cash equivalents of $1,240.6 million, long-term obligations of $5,119.5 million and total shareholders’ equity of $8,186.1 million. Management incurred capital expenditures of $1,007.5 million in the 39 weeks ended Oct. 31, 2025. For fiscal 2025, Dollar General now anticipates capital expenditures toward the lower end of the $1.3–$1.4 billion range. The company does not plan to repurchase shares in fiscal 2025.

Dollar General’s Expectations for FY25

Dollar General now expects net sales growth of 4.7%–4.9%, up from the prior outlook of 4.3%–4.8%. Same-store sales are projected to increase 2.5%–2.7% versus the earlier projected range of 2.1%–2.6%. Earnings per share are anticipated to be between $6.30 and $6.50, higher than the previous expectation of $5.80-$6.30.

Shares of this Zacks Rank #3 (Hold) company have risen 38.1% in the past year compared with the industry’s growth of 1%.

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