Will Project Elevate Keep Driving Same-Store Sales at Dollar General?

Dollar General Corporation’s DG "Project Elevate" initiative is specifically aimed at strengthening performance in its existing stores to increase same-store sales growth. Early results show that the effort is gaining momentum. But can this sustain the same-store sales growth? Let’s check out.

The "Project Elevate" program focuses on enhancing existing locations that are not yet slated for a full renovation. This encompasses physical asset improvements, merchandising optimization, product adjacency adjustments and comprehensive category enhancement across roughly 80% of the store footprint. These remodels are notably cost-efficient compared to new store constructions or comprehensive "Project Renovate" remodels.

Dollar General's goal for Project Elevate stores is to achieve first-year annualized comparable sales lifts ranging from 3% to 5%. In the first quarter of fiscal 2025, Dollar General completed 668 Project Elevate remodels, alongside 559 Project Renovate remodels. Collectively, these two remodel programs are expected to impact approximately 20% of the total store base annually. 

Given that Dollar General reported a 2.4% increase in overall same-store sales in the first quarter, driven by a 2.7% increase in the average transaction amount, the incremental boosts from Project Elevate could contribute significantly to sustaining this momentum. The success of these targeted remodels in enhancing the shopping experience and optimizing product offerings will be crucial for ongoing same-store sales expansion. With about 2,250 Elevate remodels planned for fiscal 2025, the potential sales lift could be significant.

How Are SFM and TGT Tracking Sales Growth Versus DG?

Sprouts Farmers Market, Inc. SFM is showing that store-level investment and strategic enhancements can pay off, as evidenced by its impressive 11.7% comparable store sales growth in the first quarter of 2025. Sprouts Farmers is benefiting from stronger foot traffic, supported by e-commerce gains and targeted merchandising. With a focus on supply-chain upgrades and private-label expansion, Sprouts Farmers continues to drive in-store engagement and loyalty, positioning itself as a standout player in the evolving retail landscape.

Target Corporation TGT experienced a 3.8% decline in comparable sales, following a 1.5% increase in the preceding quarter. This drop was attributed to a 5.7% fall in Target’s comparable store sales, which was somewhat offset by a 4.7% increase in comparable digital sales. Target highlighted that traffic, or the number of transactions, dropped 2.4%, and the average transaction amount decreased 1.4%.

Dollar General’s Price Performance, Valuation and Estimates

Dollar General stock has rallied 35.2% over the past three months compared with the industry’s growth of 3.9%. 
 

Dollar General’s forward 12-month price-to-earnings ratio of 19.30 reflects a lower valuation compared to the industry’s average of 32.63. DG carries a Value Score of B.
 

The Zacks Consensus Estimate for Dollar General’s current financial-year sales suggests year-over-year growth of 4.4%, while estimates for earnings per share imply a decline of 2.7%. 
 

Dollar General currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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