Dollar General reported second‑quarter earnings that topped analysts’ estimates, delivering earnings per share of $2.48 versus the consensus $2.00, a 24% beat. Operating profit rose 29.2% to $769.2 million and operating cash flow increased 28% year‑to‑date to $2.8 billion. The company lifted its full‑year FY2027 guidance to a range of $7.80‑$8.00 per share, up from $7.20‑$7.45 previously, and now trades at roughly 15.5 times FY2027 earnings.
The stock gained 8.4% in pre‑market trading and settled at $128.08, up 4.32% by mid‑afternoon, while posting a 22.75% gain over the past three months. The current price remains about 19% below the 52‑week high of $158.23.
Same‑store sales grew 3.5% in the quarter, driven by a 2.0% increase in traffic—the fifth consecutive quarter of growth—and a 1.5% rise in transaction values. Inventory levels fell 6.5% year‑over‑year, and in‑stock availability improved. Gross profit margin expanded by 127 basis points to 32.6%, helped by an estimated 81‑basis‑point, $0.25‑per‑share benefit from tariff refunds, lower LIFO provisions and reduced distribution costs.
The retailer continues its low‑price strategy, offering more than 2,000 SKUs priced at $1 or less, with 70% of items under $3. Store remodel initiatives are underway, with 651 locations in the "Project Elevate" program and 524 in "Project Renovate." Employee turnover in store positions is declining.
Looking ahead, Dollar General expects third‑quarter FY2027 earnings of $1.38 per share on revenue of $11.10 billion, with results due in October 2026. CEO Todd Vasos will step down in January 2027. Analysts from Wolfe Research, Oppenheimer and Raymond James have raised price targets to $143, $150 and $145 respectively, citing the earnings beat and potential buybacks. Competitors such as Family Dollar, Walmart and Dollar Tree were referenced in the broader market context.
