The Tennessee-based retailer beat quarterly expectations for revenue and earnings. The company said it now anticipates net sales will grow about 3.7% to 4.7%, compared to its previous expectation of about 3.4% to 4.4%. It expects diluted earnings per share to range from $5.20 to $5.80, compared to its prior outlook of approximately $5.10 to $5.80. Dollar General anticipates same-store sales will increase 1.5% to 2.5%, higher than its previous guidance of about 1.2% to 2.2%.
✅Earnings per share: $1.78 vs. $1.48 expected
✅Revenue: $10.44 billion vs. $10.31 expected
In the three-month period that ended May 2, Dollar General reported net income of $391.93 million, or $1.78 per share, compared with $363.32 million, or $1.65, in the year-ago quarter.
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Dollar General CEO Todd Vasos said the company has worked to reduce its exposure to China — and limit price hikes for shoppers. He said the retailer has worked with vendors to cut costs, moved manufacturing to other countries and made changes to its products or swapped them out for other merchandise.
He said direct imports make up about a mid- to high single-digit percentage of its overall purchases and indirect imports are about double that.
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“While the tariff landscape remains dynamic and uncertain, we expect tariffs to result in some price increases as a last resort, though, we intend to work to minimize them as much as possible,” he said.
Customer traffic dipped by 0.3% in the first quarter compared to the year-ago period, but shoppers spent more when they visited. The average transaction amount rose 2.7%, as sales in the food, seasonal, home and apparel categories all grew.
Vasos added tariffs have also increased U.S. consumers’ desire to find deep discounts. Vasos said the company’s first-quarter results reflect Dollar General’s gains from “customers across multiple income bands seeking value.”
He said store traffic and the company’s market research indicates that more middle- and higher-income customers have come to its stores more frequently and spent more when they visited.
Dollar General’s sales largely come from U.S. consumers who are on a tight budget. About 60% of the retailer’s sales come from households with an annual income of less than $30,000 per year, Vasos said last fall at a Goldman Sachs’ retail conference.
