Goodlettsville, Tennessee-based Dollar General Corporation (DG) operates as a discount retailer providing various merchandise products including consumables, laundry products, food & beverage, and more. With a market cap of $17.7 billion, Dollar General operates over 20,000 stores across the U.S. The discount retailer is expected to announce its Q3 earnings on Thursday, Dec. 5.
Ahead of the event, analysts expect Dollar General to report a profit of $0.97 per share, down 23% from $1.26 per share reported in the year-ago quarter. The company has surpassed Wall Street’s earnings estimates thrice over the past four quarters while missing on one other occasion. Its adjusted EPS for the last reported quarter plunged 20.2% year-over-year to $1.70, while missing the consensus estimates by 5%.
For fiscal 2025, analysts expect Dollar General to report an adjusted EPS of $5.86, down 22.4% from $7.55 in fiscal 2024. In fiscal 2026, its adjusted EPS is expected to grow 8.4% year-over-year, reaching $6.35.
DG stock has plunged 40.9% in 2024, substantially underperforming the S&P 500 Index’s ($SPX) 21.8% gains and the Consumer Staples Select Sector SPDR Fund’s (XLP) 12.5% returns during the same time frame.
Dollar General’s stock prices saw a massive drop of 32.2% after the company released its disappointing Q2 earnings on Aug. 29. The company reported a net sales growth of 4.2% year-over-year to $10.2 billion, falling short of Wall Street’s topline estimates by 1.6%. The company saw marginal 50 basis points growth in same-store sales leading to weaker-than-expected topline growth. Moreover, its net income plummeted 20.2% year-over-year to $374.2 million, driven by an increase in the cost of goods sold and selling, general & admin expenses. This led to a net margin contraction of 113 basis points to 3.7% compared to the year-ago quarter.
As per Dollar General’s CEO Todd Vasos, the softer sales trend is partially attributable to its core customers feeling financially constrained. Observing the lackluster performance during the year's first half, the company reduced its topline and earnings guidance, unsettling investors.
The consensus opinion on DG stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 29 analysts covering the stock, 10 recommend “Strong Buy,” one advises “Moderate Buy,” 16 suggest “Hold,” one advocates “Moderate Sell,” and one gives a “Strong Sell” rating. The mean price target of $98.82 represents a potential upside of 22.9% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
