Dollar General Corporation (NYSE:DG) stock rose Thursday after the company reported better-than-expected third-quarter fiscal 2025 results and raised its full-year guidance.
The discount retailer posted net sales of $10.65 billion, almost in line with the consensus estimate of $10.64 billion.
Sales increase of 4.6% were driven by positive sales contributions from new stores and growth in same-store sales, partially offset by the impact of store closures.
Same-store sales increased 2.5% compared to the third quarter of 2024, reflecting a 2.5% increase in customer traffic and a flat average transaction amount.
Same-store sales included growth in each of the consumables, seasonal, home products, and apparel categories.
Gross profit margin was 29.9%, a 107 basis points increase driven primarily by higher inventory markups and lower shrink; partially offset by an increased LIFO provision.
Operating profit for the third quarter of 2025 increased 31.5% to $425.9 million compared to $323.8 million in the third quarter of 2024.
Earnings came in at $1.28 per share, topping the Street's estimate of 95 cents.
Outlook
On Thursday, Dollar General said it is raising its financial expectations for 2025, primarily to reflect its outperformance in the third quarter, as well as its improved outlook for the remainder of the year, while also taking into consideration the potential for uncertainty related to consumer behavior.
The company increased fiscal 2025 earnings guidance from $5.80-$6.30 to $6.30-$6.50, compared to the consensus of $6.17.
The company raised the sales guidance from $42.36 billion-$42.56 billion to $42.52 billion-$42.60 billion compared to the consensus of $42.52 billion.
Net sales growth of approximately 4.7% to 4.9%, compared to its previous expectation of approximately 4.3% to 4.8%.
The company forecast same-store sales growth to be approximately 2.5% to 2.7%, compared to its previous expectation of approximately 2.1% to 2.6%.
The company now expects capital expenditures, including those related to investments in its strategic initiatives, to be toward the lower end of the range of $1.3 billion to $1.4 billion.
The company is also reiterating its plans to execute approximately 4,885 real estate projects in fiscal year 2025, including opening approximately 575 new stores in the U.S. and up to 15 new stores in Mexico, remodeling approximately 4,250 stores, and relocating approximately 45 stores.
Fiscal Year 2026 Store Growth Outlook
For fiscal 2026, Dollar General plans to execute approximately 4,730 real estate projects, including opening approximately 450 new stores in the U.S. (as well as approximately 10 new stores in Mexico), fully remodeling approximately 4,250 stores, and relocating approximately 20 stores.
DG Price Action: Dollar General shares were up 8.90% at $119.67 at the time of publication on Thursday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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