Dollar General sees uptick in middle- and higher-income customers
Customers spent more per trip at Dollar General last quarter, a sign that higher-income shoppers may be looking to save — and possibly stocking up ahead of expected tariffs.
Why it matters: Dollar stores have been struggling as Americans turned to budding alternatives such as same-day delivery from the likes of Amazon and Walmart.
Driving the news: Dollar General Tuesday raised its earnings forecast for the first time since the 2022 fiscal year, after beating revenue expectations with sales jumping 2.4% at stores open at least a year.
The discount retailer set its all-time quarterly sales record of $10.4 billion as average transaction amounts rose 2.7% in the quarter spanning most of February, March and April.
CEO Todd Vasos said on an earnings call Tuesday that while the company's core customer "remains financially constrained," Dollar General has seen more activity from both middle- and higher-income customers.
Zoom in: The company is also avoiding a big blow from tariffs.
Less than 10% of the company's goods come directly from foreign markets, Vasos said. It is mitigating impacts where it can, though Vasos said the company expects tariffs to result in some price increases "as a last resort."
Yes, but: While the average customer spent more per trip, the number of customers visiting Dollar General stores declined by 0.3%.
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