Discount stores Dollar Tree (DLTR) and Dollar General (DG) stand strong in a dynamic landscape

Leading discount retailers Dollar Tree, Inc. (NASDAQ: DLTR) and Dollar General Corporation (NYSE: DG) reported their second quarter 2025 earnings results over the past week. Both companies delivered better-than-expected results and provided upbeat outlooks for the fiscal year. Here’s a look at their performance in a challenging environment:  

Solid Q2

Dollar Tree and Dollar General both recorded growth in their sales and profits in the second quarter of 2025. Dollar Tree’s sales increased 12% year-over-year to $4.6 billion while Dollar General’s sales grew 5% to $10.7 billion. DLTR’s adjusted earnings per share rose 13% to $0.77 while DG’s EPS grew 9% to $1.86 compared to last year.

Business momentum

DLTR and DG continue to benefit from a strong value proposition. The dollar stores are preferred destinations for customers seeking value in an uncertain economic environment. Both retailers saw growth in same-store sales, driven by increases in traffic and transactions, as they gained customers from all income groups, with higher trade-in activity from middle to higher income customers. Their strategy of offering a wide assortment of products at multiple price points continues to pay off.

In Q2, Dollar Tree’s same-store sales jumped 6.5%, helped by an increase of 3% in traffic and average ticket each. Dollar General’s same-store sales were up 2.8%, with both traffic and average transaction amount rising over 1%.

The discount stores benefited from growth in both consumables and discretionary categories. In Q2, Dollar Tree saw comps for both consumables and discretionary increase over 6%. Dollar General recorded mid-single-digit sales growth across all its categories in the quarter.

DLTR and DG also witnessed margin expansion in the second quarter. DLTR’s gross margin expanded 20 basis points to 34.4% and DG’s gross margin increased by 137 basis points to 31.3%. DLTR’s margins benefited from favorable pricing and lower costs, while DG’s margins gained from lower shrink and higher inventory markups.

Tariffs remain a source of volatility for Dollar Tree and Dollar General but both retailers believe they will be able to mitigate most of the impact from tariffs on their businesses.

Store fleet

The retailers continue to revamp their store fleet to help drive growth. During the second quarter, Dollar General opened 204 new stores, remodeled 729 stores through its Project Elevate program and 592 stores through the Project Renovate program, and relocated 15 stores. Dollar Tree opened 106 new stores in Q2 and converted around 585 stores to the 3.0 multi-price format.

Encouraging outlook

Both Dollar Tree and Dollar General raised their guidance for fiscal year 2025. Dollar Tree now expects net sales of $19.3-19.5 billion, comparable sales growth of 4-6%, and adjusted EPS of $5.32-5.72. Dollar General now expects net sales growth of 4.3-4.8%, same-store sales growth of 2.1-2.6%, and EPS of $5.80-6.30.