Dollar General Corporation (DG) Might Be Wrong About Consumer Spending, Says Jim Cramer

Dollar General Corporation (NYSE:DG) is one of the Jim Cramer Says US Has To Give Some Chips To China & Discusses These 10 Stocks.

Dollar General Corporation (NYSE:DG) is a discount retailer with a presence all over the US. Its shares have gained 47% year-to-date, partly due to a 15.8% gain in June. Dollar General Corporation (NYSE:DG)’s shares rose after the firm’s Q1 2025 earnings saw it post $1.78 in adjusted earnings and 10.4 billion in revenue. Both of these beat analyst estimates of $1.48 and $10.31 billion by a wide margin. Dollar General Corporation (NYSE:DG)’s strong performance allayed investor concerns about a slowdown in consumer spending. However, while the firm has warned about a consumer slowdown, Cramer shared how he’s hearing otherwise:

“I had a, this outfit called HundredX on last night, it was a terrific Goldman guy who’s left Goldman to do this. Robert Pace. The indications of spend for the consumer, it’s going up. I mean, nothing is as it seems. I mean his work is just superb and it just says, right now the consumer is actually looking to spend more, maybe much more.  That’s not what you get from Dollar Tree, Dollar General.”

In his previous remarks about Dollar General Corporation (NYSE:DG), Cramer commented on the firm’s spectacular earnings report:

“But Dollar General and Dollar Tree have behaved very differently after reporting earnings over the past couple days. When Dollar General announced its results yesterday and the numbers were excellent, the stock caught fire…

… The difference between these two comes down to what they had to say about their ability to control costs and offset the impact of, you bet, go ahead, the president’s tariffs… Unfortunately, we’re also in the middle of some volatile trade negotiations. President’s tariffs are potentially hurting their ability to keep prices low, and this is why Dollar General soared yesterday and Dollar Tree plummeted today, because Dollar Tree seems to have trouble, let’s say, more trouble with the tariffs.

At Dollar General, management remains confident they’ll be able to navigate these challenges by pulling a few levers, negotiating cost concessions with their vendors, shifting manufacturing to other countries when possible, or even just finding substitute products made in places where the tariffs are lower. While management’s confident this can work, they do expect the tariffs to result in some price increases as a last resort…

While both companies source some of their merchandise from overseas, especially from China, there’s a major difference in how much each company imports directly. See, Dollar General only imports 4% of its goods directly from foreign manufacturers. For Dollar Tree, it’s 40%…

… So let me give you the bottom line: While both these companies might have the word dollar in their names, the subtle differences in their supply chain structure are having a huge impact on their stocks. That’s why Dollar General soared yesterday, and Dollar Tree is now in the [house of pain]. And it’s why you should watch out for the distinction between direct imports and indirect imports in the rest of retail because going forward, it’s really going to matter.”

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Disclosure: None. This article is originally published at Insider Monkey.