Main takeaways from Dollar General’s (DG) Q1 2025 earnings report

Shares of Dollar General Corporation (NYSE: DG) soared on Tuesday after the company delivered better-than-expected earnings results for the first quarter of 2025 and raised its outlook for the full year. The stock was up over 14% in midday trade. The discount retailer updated its annual guidance amid the ongoing tariff uncertainty on the assumption that it will be able to soften most of the impact to its costs from the current tariffs.

Results beat expectations

In the first quarter of 2025, Dollar General’s net sales increased 5.3% year-over-year to $10.4 billion, beating estimates of $10.3 billion. The top line growth was driven by positive sales contributions from new stores and growth in same-store sales. Earnings per share increased 7.9% to $1.78, surpassing projections of $1.48.  

Growth in all categories

In Q1, same-store sales increased 2.4%, reflecting a 2.7% increase in average transaction amount and a 0.3% drop in customer traffic. Same-store sales included growth in both the consumables and non-consumables categories.

Sales in the consumables category increased 5.2% YoY to $8 billion in the first quarter. Sales in seasonal increased 6.2% to $1 billion while sales in home products rose 5.9% to $507.1 million. Apparel sales grew 3.2% to $269.1 million.

DG’s gross margin increased 78 basis points to 31% in Q1, helped by lower shrink and higher inventory mark-ups. During the quarter, the company opened 156 new stores, remodeled 668 stores through Project Elevate and 559 stores through Project Renovate, and relocated 23 stores.

Raised outlook

Looking ahead to the rest of the fiscal year, Dollar General sees uncertainty relating to tariffs and consumer behavior. In its report, the company said the tariff environment remains highly dynamic and that specific tariffs on goods imported by it continue to evolve. DG updated its guidance for fiscal year 2025 to reflect its outperformance in Q1 and the ongoing tariff uncertainty.

The revised outlook assumes the company will be able to alleviate a substantial portion of the impact to its costs from tariffs, but that consumer spending could be pressured by price increases brought on by the tariffs.

DG now expects sales to grow approx. 3.7-4.7% in fiscal year 2025 versus its previous expectation of 3.4-4.4%. Same-store sales growth is now expected to be approx. 1.5-2.5% versus the prior range of 1.2-2.2%. EPS is now expected to be $5.20-5.80 versus the previous range of $5.10-5.80.