Dollar General sees strong Q1 sales and EPS, and raises FY25 guidance
US discount store chain Dollar General has recorded $10.4bn in net sales in the first quarter (Q1) of the fiscal year 2025 (FY25), ending on 2 May 2025 - a 5.3% increase from the corresponding quarter of the previous fiscal year.
The growth was attributed to new stores and a 2.4% rise in same-store sales, despite some store closures.
The company also saw a 5.5% increase in operating profit, amounting to $576.1m.
Gross profit as a percentage of net sales improved, rising from 30.2% to 31% year-on-year - a 78 basis point increase. This was primarily due to lower shrink and higher inventory markups, although increased markdowns partially offset these gains.
The company's net income for the quarter stood at $391.9m - a 7.9% increase from the previous year's $363.3m.
Diluted earnings per share (EPS) also grew 7.9% to $1.78.
Selling, general and administrative expenses (SG&A) rose by 77 basis points to 25.4% of net sales, with retail labour, incentive compensation, and repairs and maintenance the main contributors to the increase.
Merchandise inventories at the end of the quarter were valued at $6.6bn, a 7% decrease on an average per-store basis compared to the previous year.
Capital expenditures for the quarter totalled $291m, with significant investments in store improvements, new store facilities, distribution, transportation and technology upgrades.
Dollar General CEO Todd Vasos stated: '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.'
'These efforts contributed to market share gains in sales of both consumables and non-consumables, and drove growth with both our core customer and trade-in customers during the quarter."
Amidst the uncertainty of tariffs and their potential impact on consumer behaviour and business costs, Dollar General has updated its fiscal year 2025 guidance. The company now anticipates net sales growth between 3.7% and 4.7%, with same-store sales expected to increase by 1.5% to 2.5%.
The diluted EPS forecast is set at approximately $5.20 to $5.80, assuming an effective tax rate of around 23.5%.
No share repurchases are planned for the fiscal year 2025, and capital expenditures are projected to be between $1.3bn and $1.4bn. The company also plans to carry out 4,885 real estate projects, including opening new stores in the US and Mexico, and remodel existing stores through two major projects.
In March 2025, Dollar General partnered DoorDash to integrate Supplemental Nutrition Assistance Program/Electronic Benefits Transfer payment options at 16,000 locations through DoorDash Marketplace.
"Dollar General sees strong Q1 sales and EPS, and raises FY25 guidance" was originally created and published by Retail Insight Network, a GlobalData owned brand.
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