Dollar General has raised its full-year forecast after beating first-quarter expectations for earnings and revenue. CEO Todd Vasos attributed the growth to the company’s efforts to reduce its exposure to China and minimize price increases, while attracting more middle- and upper-income customers seeking value.
The retailer reported a 16% jump in shares on Tuesday following the announcement of its revised guidance. Dollar General now anticipates net sales growth of 3.7% to 4.7%, compared to its previous expectation of 3.4% to 4.4%. It expects diluted earnings per share to range from $5.20 to $5.80.
Dollar General’s first-quarter results exceeded Wall Street’s estimates, with earnings per share at $1.78 and revenue at $10.44 billion. The company reported a net income of $391.93 million in the quarter, with same-store sales increasing 1.5% to 2.5%.
The retailer’s efforts to reduce its exposure to China have resulted in lower direct imports, which now make up around a mid- to high single-digit percentage of overall purchases. Indirect imports are double that amount.
CEO Vasos emphasized the importance of minimizing price increases as a result of tariffs, stating that the company intends to work to minimize them as much as possible. CFO Kelly Dilts noted that full-year guidance assumes offsetting “a significant portion of the anticipated tariff impact on gross margin.”
Dollar General’s customer traffic dipped by 0.3% in the first quarter but shoppers spent more when they visited, with average transaction amounts rising 2.7%. The company has seen growth from middle- and higher-income customers seeking value, driven by increased demand for deep discounts.
The retailer’s core customer base remains financially constrained, according to Vasos. About 60% of sales come from households with an annual income of less than $30,000 per year.
In addition to its efforts to attract price-conscious shoppers, Dollar General has made changes to improve the customer experience, including reducing employee turnover and launching home delivery services through DoorDash.
Source: https://www.cnbc.com/2025/06/03/dollar-general-dg-q1-2025-earnings.html