Dollar General Beats Estimates and Raises Guidance, Shares Jump Nearly 6%

Dollar General Corp. shares rose Thursday after the company reported second-quarter fiscal 2026 results and raised its full-year outlook.

The discount retailer reported net sales of $11.29 billion, up 5.2% year over year. Revenue surpassed the consensus estimate of $11.197 billion.

Earnings per share rose 33% to $2.48, beating Wall Street expectations of $2.01. The results included a benefit of approximately 25 cents from tariff refunds.

Dollar General also plans to resume share repurchases in the third quarter. The company expects to buy back up to $700 million in shares in the second half of the year, citing strong cash flow and liquidity.

On the earnings call, Dollar General said persistent inflation and gasoline prices of $4 or higher in some states continue to pressure its core customers. The company said customers are "stretching every dollar" and buying fewer items per trip as they remain uncertain about the coming weeks.

Traffic Growth Continues

Same-store sales rose 3.5% compared with the year-ago quarter. Traffic increased 2%, and average transaction value grew 1.5%.

The quarter marked Dollar General's fifth consecutive quarter of traffic growth. It also marked its sixth consecutive quarter of positive comparable sales growth across all four merchandise categories.

Gross margin expanded 127 basis points to 32.6%. Tariff refunds, lower LIFO reserves, and reduced distribution costs drove the increase. Higher markdowns and transportation expenses partially offset those gains.

Dollar General Expands $1 Assortment

On the company's earnings call, CEO Todd Vasos said the core customer's financial situation remains strained.

Vasos said: "Most notably, higher and more volatile fuel prices are forcing customers to further prioritize their purchases, focusing on value and affordability."

Dollar General said its Value Valley assortment now includes more than 600 rotating items priced at $1 each. During the quarter, the retailer expanded its $1 off-shelf displays to more than 9,000 stores.

Dollar General Raises Fiscal 2026 Outlook

Dollar General raised its fiscal 2026 EPS guidance to between $7.80 and $8.00, up from the prior range of $7.20 to $7.45. The consensus estimate was $7.41 per share.

The company also raised its sales forecast to between $44.43 billion and $44.56 billion, versus a prior range of $44.31 billion to $44.52 billion. Wall Street expected sales of $44.43 billion.

Dollar General now expects same-store sales growth of 2.5% to 2.9%, up from its prior forecast of 2.2% to 2.7%.

DG stock movement: As of Thursday's writing, Dollar General shares were up 5.99% at $130.14.