Dollar General Sales Surge in Sign of Times
By Reuters | 28 Aug, 2025

The discount chain's value image helps it thrive in a darkening economy even as it's forced to begin passing on some tariff costs.

Dollar General raised its annual forecasts on Thursday, banking on its same-day delivery partnerships and store remodels to help capture increased demand from value-seeking consumers from mixed income tiers in the United States.

Shoppers across income categories have been heading to dollar and discount stores for cheaper groceries, apparel and seasonal products as U.S. tariffs spike economic uncertainty and sticky inflation depletes consumer budgets. 

Dollar General, like other retailers, is walking the tightrope of keeping prices low for an increasingly value-seeking consumer, while passing on some impact from cost increases due to import tariffs.

The company raised its annual earnings per share target to between $5.80 and $6.30, from $5.20 to $5.80 per share, as it also benefits from cost savings through its two store-remodeling projects to fix product placements and merchandising. 

The lower-end of its forecast accounted for increased pressure on the consumer in the key holiday quarter, executives said in a post-earnings call. 

Dollar General's shares, up 47% so far this year, reversed premarket gains and rose marginally in choppy morning trading. 

U.S. President Donald Trump's import tariffs have already resulted in some price increases, Dollar General CEO Todd Vasos said. Less than 70% of its direct imports were from China, the company had said in June.

The company said it was keeping prices affordable across categories, particularly in seasonal products, as more middle- and higher-income consumers also begin to shop at its stores for cheaper options.

Its core lower-income consumer also increased spending in the second quarter despite worsening sentiment, Vasos said.

The company is expanding its same-day delivery partnership with DoorDash to 16,000 stores. Its tie-up with Uber Eats also kicked off this month, as it aims for a bigger share of middle- and higher-income consumer wallets.

"The key will be sustaining the momentum, given that Walmart is growing its Plus effort at a double-digit pace (and) Amazon is expanding its same-day grocery offering, with more focus in rural areas," said Michael Montani, analyst at Evercore ISI.

For the three months ended August 1, Dollar General's same-stores sales rose 2.8%, beating an estimate of a 2.5% rise, helped by growth in customer visits as well as the amount spent per visit.

The company now expects 2025 net sales growth of 4.3% to 4.8%, up from its prior forecast of between 3.7% and 4.7% growth, while its second-quarter profit of $1.86 per share also beat estimates.

(Reporting by Juveria Tabassum and Sanskriti Shekhar; Editing by Pooja Desai)