Dollar General Corporation (NYSE:DG) stock fell on Thursday after the company reported fourth-quarter fiscal 2025 results and issued fiscal 2026 guidance.
Q4 Sales Beat Estimates, Revenue Jumps 6%
The discount retailer posted net sales of $10.91 billion, beating the consensus estimate of $10.82 billion.
The sales increase of 5.9% was driven by growth in same-store sales and positive sales contributions from new stores, partially offset by the impact of store closures.
Same-store sales increased 4.3% compared to the fourth quarter of 2024, reflecting increases of 2.6% in customer traffic and 1.7% in average transaction amount.
Same-store sales in the fourth quarter of fiscal 2025 included growth in each of the consumables, seasonal, home products, and apparel categories.
Profit Surges As Margins Improve And Store Traffic Rises
The company reported gross profit margin of 30.4% compared to 29.4% a year ago, driven primarily by lower shrink, higher inventory markups, and lower inventory damages; partially offset by an increased LIFO provision.
Operating profit increased 106.1% to $606.3 million compared to $294.2 million a year ago.
In the fourth quarter of fiscal 2024, $232 million in charges related to a store portfolio optimization review negatively impacted the company’s operating profit.
Earnings came in at $1.93 per share, topping the Street’s estimate of 1.65 cents.
Issues 2026 Outlook With Slower Sales Growth
Dollar General issued fiscal 2026 guidance projecting net sales of $44.31 billion to $44.52 billion, roughly in line with analysts’ consensus estimate of $44.36 billion.
The company expects net sales growth of about 3.7% to 4.2% in fiscal 2026, compared with 5.2% growth in fiscal 2025.
Dollar General also forecast earnings of $7.10 to $7.35 per share for 2026, versus the $7.23 per share consensus estimate.
The retailer projects same-store sales growth of approximately 2.2% to 2.7% for the year.
Plans 4,700+ Store Projects In 2026
For fiscal 2026, Dollar General reiterated plans to execute approximately 4,730 real estate projects.
These include opening about 450 new stores in the United States and about 10 new stores in Mexico, remodeling roughly 2,000 stores through Project Renovate and about 2,250 stores through Project Elevate, and relocating approximately 20 stores.
In January, Dollar General agreed to a $15 million settlement resolving nationwide claims that shoppers were charged prices at checkout that did not match advertised shelf prices, even as the company itself did not admit to any wrongdoing.
DG Price Action: Dollar General shares were down 6.45% at $135.50 at the time of publication on Thursday, according to Benzinga Pro data.
Photo by Pamela Brick via Shutterstock
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