Dollar General shares jumped 13.6% on Monday after the retailer hiked its sales forecast and reported robust earnings as tariff fears sent consumers hunting for deals.
The company now expects annual same-store sales growth between 1.5% and 2.5%, up from its prior goal of 1.2% to 2.2%.
It also raised the low end of its yearly earnings per share target by 10 cents to $5.20 and kept the top end unchanged at $5.80.
“Looking ahead, we are uniquely well-positioned to serve our customer in a variety of economic environments,” Todd Vasos, Dollar General’s chief executive, said in a press release.
It’s a notable turnaround for Dollar General, which last year warned of a hesitant consumer that only had “enough for basic essentials” and was forced to slash its annual sales and profit forecasts. In the previous quarter, it just barely beat estimates.
The company also shuttered nearly 100 stores, which temporarily cut into profits, and lost budget-conscious shoppers to bigger chains like Walmart and Target as they doubled down on their discounts and deals.
Dollar General largely outperformed in the first quarter of 2025, reporting same-store sales that grew 2.4% in the three months ended May 2.
That’s above estimates of a 1.41% rise as higher average transaction sizes helped to offset lower store traffic.
Its earnings per share of $1.78 also beat projections of $1.48.
Net sales rose 5.3% to $10.4 billion in the first quarter, above $9.9 billion in the same period last year. Analysts polled by FactSet had expected $10.29 billion.
The affordable retailer chalked up the strong performance to recent cost-cutting efforts, like closing underperforming stores and remodeling existing locations.
Dollar General said it plans to open 575 new stores across the country in fiscal year 2025.
But the retailer acknowledged persistent economic uncertainty throughout the year due to Trump’s tariffs.
“Uncertainty exists for the remainder of the year regarding the potential impact of tariffs on the business, and particularly on consumer behavior,” Dollar General said in a statement.
“The tariff environment remains highly dynamic, and the specific tariffs applicable to goods imported by the Company and its suppliers into the US continue to evolve.”
The updated forecast assumes current tariff rates will remain in place through mid-August, though Dollar General said it has backup plans in case the initial tariffs on China are reinstated – a hefty 145% rate compared to the current 30%.
Some of its private brand products are tangled up in President Trump’s trade war, though the company expects it will be able to mitigate the impact. It is concerned, however, that consumer spending could take a hit, the company said.
Consumer sentiment came in at 52.2 in May, unchanged from the month before, according to the University of Michigan’s survey.
Though a slightly higher figure than a preliminary reading released two weeks beforehand, it still neared record lows in data tracing back to 1952.
But dollar stores tend to perform better than competitors when the economy weakens as customers pivot to cheaper essentials.
