Discount retailer Dollar General Corp (NYSE:DG) reported better-than-expected third-quarter earnings on Thursday, driven by higher traffic and improved profit margins, and raised its full-year guidance, sending shares up nearly 9% in early trading.
For the quarter ended November 1, Dollar General posted revenue of $10.65 billion, slightly above analysts’ expectations of $10.64 billion and up 4.6% from a year earlier.
Net income surged 43.8% to $282.7 million, while earnings per share came in at $1.28, beating consensus estimates of $0.94.
Same-store sales rose 2.5%, entirely supported by higher customer traffic, with the average transaction size largely unchanged.
The company’s operating profit jumped 31.5% to $425.9 million, reflecting a gross margin expansion to 29.9% from 28.8% a year ago, aided by better markups and lower shrink. Selling, general and administrative expenses were 25.9% of sales, slightly higher than last year, mainly due to increased incentive compensation and store maintenance costs.
The company raised its full-year 2025 outlook, expecting earnings per share between $6.30 and $6.50, above prior guidance of $5.80 to $6.30 and analyst forecasts of $6.13. Revenue is projected to grow roughly 4.7% to 4.9% year-on-year, while same-store sales are expected to increase 2.5% to 2.7%.
Jefferies analysts said the results show strong operational leverage and improved cost efficiency. “FY guidance was lifted, signaling confidence in holiday execution and continued market share gains across both departments. Inventory discipline is notable,” the firm wrote.
Dollar General also outlined plans for continued store expansion and remodeling into fiscal 2026, with approximately 450 new US stores, 10 in Mexico, and thousands of renovations and upgrades under its “Renovate” and “Elevate” initiatives.