Dollar General Corporation (DG) Q1 2026: Revenue Growth and EPS Beat — Positive Outlook

Dollar General Corporation (NYSE: DG) reported its first-quarter results for fiscal year 2026, showcasing a solid performance compared to the previous year. The company achieved net sales of $10.8 billion, an increase of $0.4 billion or +3.4% year-over-year (YoY) from $10.4 billion in Q1 2025. This growth was driven by positive contributions from new store openings and a 2.0% increase in same-store sales.

Key Financial Metrics:

• Net Sales: $10.8 billion, up $0.4 billion or +3.4% YoY
• Same-Store Sales: Increased 2.0%
• Operating Profit: $638.5 million, up $62.4 million or +10.8% YoY
• Diluted EPS: $2.00, up $0.22 or +12.4% YoY from $1.78
• Cash Flow from Operations: $716.2 million
• Quarterly Cash Dividend: Declared at $0.59 per share

This quarter can be considered a good one for shareholders, as the company not only met but exceeded expectations in terms of earnings per share and operating profit. The increase in diluted EPS to $2.00 reflects strong operational efficiency and margin expansion, which is particularly noteworthy given the challenges posed by severe winter weather and rising fuel costs.

Detailed Analysis:

Dollar General's net sales growth of 3.4% was supported by a combination of new store openings and a modest increase in same-store sales, which rose by 2.0%. The same-store sales growth was attributed to a 1.4% increase in customer traffic and a 0.5% rise in average transaction amounts. The company successfully navigated the macroeconomic environment, demonstrating resilience through its essential product offerings.

Gross profit as a percentage of net sales improved to 31.6%, up from 31.0% in the prior year, driven by higher inventory markups and reduced shrinkage. However, selling, general, and administrative expenses (SG&A) as a percentage of net sales increased slightly to 25.7%, up from 25.4% in Q1 2025, primarily due to higher depreciation and utility costs.

Operating profit for the quarter increased to $638.5 million, reflecting a robust operating margin expansion. The decrease in net interest expense by 26.9% to $47.2 million also contributed positively to the bottom line, allowing the company to report a net income of $444.1 million, up 13.3% from $391.9 million in the same quarter last year.

Dividend and Guidance:

The Board of Directors declared a quarterly cash dividend of $0.59 per share, payable on or before July 21, 2026. This reflects the company's commitment to returning value to shareholders while maintaining a strong financial position.

Looking ahead, Dollar General updated its financial guidance for fiscal year 2026, now expecting:

• Net Sales Growth: Approximately 3.7% to 4.2%
• Same-Store Sales Growth: Approximately 2.2% to 2.7%
• Diluted EPS: In the range of $7.20 to $7.45, up from the previous range of $7.10 to $7.35

The company also plans to execute approximately 4,730 real estate projects, including the opening of around 450 new stores in the U.S. and 10 new stores in Mexico, which should further enhance its market presence.

Forward Catalyst:

Investors should closely monitor Dollar General's performance in the upcoming quarters, particularly its ability to sustain same-store sales growth and manage costs effectively amid ongoing economic challenges. The company's strategic initiatives, including store openings and remodels, will be critical in driving future growth and shareholder value. Additionally, the upcoming conference call on June 2, 2026, will provide further insights into management's outlook and operational strategies.

Note: All amounts are in thousands.

May 1, 2026	% of Net Sales	May 2, 2025	% of Net Sales
$10,786,965	100.00 %	$10,435,979	100.00 %
7,376,493	68.38	7,204,691	69.04
3,410,472	31.62	3,231,288	30.96
2,771,956	25.70	2,655,175	25.44
638,516	5.92	576,113	5.52
47,238	0.44	64,604	0.62
591,278	5.48	511,509	4.90
147,151	1.36	119,581	1.15
$444,127	4.12 %	$391,928	3.76 %
$2.02		$1.78
$2.00		$1.78
220,347		219,986
221,559		220,135

Note: All amounts are in thousands.

May 1, 2026	May 2, 2025	January 30, 2026
$1,353,113	$850,018	$1,138,501
6,635,903	6,590,096	6,331,861
12,016	31,896	17,158
466,444	424,293	410,283
8,467,476	7,896,303	7,897,803
6,471,946	6,279,529	6,398,589
11,165,359	11,218,240	11,072,500
4,338,589	4,338,589	4,338,589
1,200,061	1,199,700	1,200,050
56,222	55,300	56,199
$31,699,653	$30,987,661	$30,963,730
$13,302	$19,591	$14,401
1,553,358	1,478,895	1,532,489
4,341,284	3,836,222	4,051,592
1,139,351	1,031,210	1,263,296
195,724	37,747	99,357
7,243,019	6,403,665	6,961,135
4,563,106	5,724,739	4,565,881
9,668,635	9,794,789	9,605,885
1,089,414	1,096,048	1,038,863
292,195	264,757	280,004
22,856,369	23,283,998	22,451,768
-	-	-
193,013	192,557	192,694
3,926,810	3,838,541	3,909,593
4,712,449	3,667,792	4,398,466
11,012	4,773	11,209
8,843,284	7,703,663	8,511,962
$31,699,653	$30,987,661	$30,963,730

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