Dollar General Corp (NYSE:DG) shares edged more than 2% lower on Tuesday after the retailer reported first quarter results that topped earnings expectations but delivered a slight revenue miss, alongside in-line same-store sales growth.
The company reported diluted earnings per share of $2.00, above Wall Street estimates of roughly $1.89 to $1.90. Revenue rose 3.4% year-over-year to $10.79 billion, just below the $10.82 billion consensus estimate. Same-store sales increased 2.0%, in line with expectations.
Dollar General raised its fiscal 2026 adjusted earnings guidance to a range of $7.20 to $7.45 per share, up from $7.10 to $7.35 previously. The company noted the updated outlook reflects the first-quarter performance as well as a lower assumed tax rate of approximately 24.5%.
The retailer maintained its full-year net sales growth forecast of 3.7% to 4.2% and same-store sales growth outlook of 2.2% to 2.7%. Capital expenditures are expected to range between $1.4 billion and $1.5 billion.
Dollar General also declared a quarterly dividend of $0.59 per share.
“We are pleased with our first-quarter EPS performance, which exceeded our expectations as strong operating margin expansion more than offset the impact of severe winter weather and higher fuel costs,” Dollar General CEO Todd Vasos said in a statement.
“Our topline results were highlighted by positive customer traffic and balanced category growth, while continued progress on our key initiatives drove another quarter of strong operating profit growth.”
Jefferies analysts described Dollar General’s quarter as a quality Q1 beat and reiterated a ‘Buy’ rating, citing traffic-driven performance and continued margin improvement.
The firm wrote that the results were underpinned by comps led by customer traffic and strong gross margin expansion of 65 basis points, which it said reinforces the ongoing self-help narrative.
The analysts highlighted that comparable sales growth of 2.0% was driven more by traffic (+1.4%) than by ticket (+0.5%), a mix they view as supportive for value retailers in the current environment. They also noted that growth was broad-based across categories, reinforcing their view that Dollar General is continuing to gain share.
On profitability, Jefferies pointed to 10.8% operating profit growth and 12.4% EPS growth, attributing the improvement to inventory markups alongside gains in shrink and damages, partially offset by markdown pressure and higher transportation costs. The firm said the results reflect improving execution and stronger operational discipline.
Jefferies also emphasized the company’s “Back to Basics” focus on shrink reduction and tighter inventory management, arguing these are structural drivers of margin recovery rather than one-off benefits.
The firm added that it continues to see a path toward 6% to 7% operating margins over time, supported by mix improvements, private label expansion, and additional upside from retail media and digital initiatives.