Dollar General sees more customer traffic at stores, something its top rival didn't have

MW Dollar General sees more customer traffic at stores, something its top rival didn't have

By Tomi Kilgore

The deep-discount retailer's stock surged toward a four-month high after a beat-and-raise quarter, as increased customer traffic led to market share gains

Dollar General's stock rallies as sales rose more than expected, and the company took market share from its rivals.

Shares of Dollar General Corp. rallied toward a four-month high in early Thursday trading, after the deep-discount retailer's fiscal third-quarter sales rose above expectations and the full-year outlook was raised, amid signs it was making headway against its rivals.

The company's $(DG)$ upbeat results and outlook come as off-price retailers have been among the top retail performers. Stubborn inflation, growing concerns about the economy and uncertainty surrounding tariffs are pushing shoppers, regardless of income, to hunt for bargains. In this environment, Dollar General appears to be winning.

For the quarter to Oct. 31, same-store sales, or sales of stores open at least 13 months, rose 2.5% from the same period a year ago, to beat the average analyst estimate compiled by FactSet for growth of 2.3%. That marked the eighth straight quarter of growth.

Driving the sales increase, store traffic increased 2.5% and the average transaction amount was flat.

While rival Dollar Tree Inc.'s $(DLTR)$ sales growth reported Wednesday was higher at 4.2%, that included a 0.3% drop in traffic, while the average ticket rose 4.5%.

Dollar General Chief Executive Todd Vasos said the company's sales performance in the latest quarter was highlighted by market-share gains across both consumable items, such as packaged foods, cleaning products and health and beauty products, and non-consumable items, which include apparel and home goods.

Dollar General's stock climbed 3.3% in premarket trading, putting it on track to open around the highest closing price seen since Aug. 20.

Overall net sales grew 4.6% to $10.65 billion, above the FactSet consensus of $10.62 billion. That was the fifth straight quarter of top-line beats, and the ninth beat in the past 10 quarters.

Net income jumped 43.8% to $282.7 million, and earnings per share of $1.28 topped the FactSet consensus of 95 cents. That was the widest margin for a bottom-line beat in at least five years, according to available FactSet data back to August 2020.

Looking ahead, the company raised its fiscal 2025 guidance range for EPS to $6.30 to $6.50 from $5.80 to $6.30, which marked the third straight quarter the outlook was raised.

The company also lifted its guidance ranges for same-store sales growth to 2.5% to 2.7% from 2.1% to 2.6% and for net sales to rise 4.7% to 4.9% from a previous growth projection of 4.3% to 4.8%.

Dollar General affirmed its outlook for opening about 575 stores in fiscal 2025, which runs through January. For fiscal 2026, the company plans to open 450 stores.

Shares of Dollar General have run up 44.9% in 2025 through Wednesday, while rival Dollar Tree's stock has climbed 50.7% and the S&P 500 index SPX has advanced 16.5%.

-Tomi Kilgore

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December 04, 2025 07:47 ET (12:47 GMT)

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