Dollar General Q1 Results Exceed Expectations
Net sales at Dollar General Corp. climbed 5.3% to $10.4 billion in its first quarter, ended May 2, compared with $9.9 billion in the first quarter of 2024.
The net sales increase was driven by positive sales contributions from new stores and growth in same-store sales, partly offset by the impact of store closures. Same-store sales rose 2.4%, reflecting a 2.7% increase in average transaction amount and a 0.3% decrease in customer traffic. Same-store sales included growth in each of the consumables, seasonal, home products and apparel categories.
Dollar General reported net income of $391.9 million for Q1, an increase of 7.9%. Diluted EPS grew 7.9% to $1.78, compared with last year’s $1.65.
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Gross profit as a percentage of net sales was 31.0% in Q1, compared with last year's 30.2%, an increase of 78 basis points. This gross profit rate bump was driven primarily by lower shrink and higher inventory markups, and partly offset by increased markdowns.
Selling, general and administrative expenses as a percentage of net sales were 25.4%, an increase of 77 basis points. The primary expenses that were a higher percentage of net sales were retail labor, incentive compensation, and repairs and maintenance.
Operating profit saw an uptick of 5.5% to $576.1 million.
“We are pleased with our start to the year, including strong same-store sales and EPS results,” said Todd Vasos, Dollar General CEO. “Our efforts to improve execution and enhance the associate and customer experience are yielding positive outcomes in both our operational performance and our financial results. I want to thank our team for their hard work and dedication to serving our customers and communities with value and convenience every day. These efforts contributed to market share gains in sales of both consumables and nonconsumables, and drove growth with both our core customer and trade-in customers during the quarter.”
By end of Q1 2025, Dollar General's total merchandise inventories, at cost, were $6.6 billion, a decrease of 7.0% on an average per-store basis.
During its latest quarter, the company opened 156 new stores, remodeled 668 stores through Project Elevate and 559 stores through Project Renovate, and relocated 23 stores.
Fiscal Year 2025 Outlook
While Q1 financial results exceeded internal expectations, Dollar General noted that uncertainty exists for the remainder of the year regarding the potential impact of tariffs on the business, and particularly on consumer behavior.
As a result, the company updated its expectations for the year. This updated guidance assumes that Dollar General will be able to mitigate a significant portion of the potential impact to its cost of goods from tariffs at currently implemented rates, but that consumer spending could be pressured by tariff-related price increases.
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The updated guidance assumes that current tariff rates remain in place through mid-August 2025, and the company has plans in place to address the potential reversion to the tariff rates previously announced on goods from China on April 2.
The company now expects the following for fiscal year 2025:
- Net sales growth of approximately 3.7% to 4.7%, compared with its previous expectation of approximately 3.4% to 4.4%
- Same-store sales growth of approximately 1.5% to 2.5%, compared with its previous expectation of approximately 1.2% to 2.2%
- Diluted EPS of approximately $5.20 to $5.80, compared with its previous expectation of approximately $5.10 to $5.80
Dollar General also reiterated its plans to execute approximately 4,885 real estate projects in FY2025, including opening approximately 575 new stores in the United States and up to 15 new stores in Mexico, remodeling approximately 2,000 stores through Project Renovate, remodeling approximately 2,250 stores through Project Elevate and relocating approximately 45 stores.
“Looking ahead, we are uniquely well positioned to serve our customer in a variety of economic environments," said Vasos. "We are proud of our progress and are excited about the future of this business as we look to further create sustainable long-term value for our shareholders.”
The board of directors declared a quarterly cash dividend of 59 cents per share on the company’s common stock, payable on or before July 22, to shareholders of record on July 8.
As of May 2, Goodlettsville, Tenn.-based Dollar General operated 20,582 Dollar General, DG Market, DGX and pOpshelf stores across the United States, and Mi Súper Dollar General stores in Mexico. The retailer is No. 16 on The PG 100, Progressive Grocer’s 2025 list of the top food and consumables retailers in North America.
