Dollar General Lifts Full-Year EPS Outlook to $8.00
The neighborhood general store posted $2.48 a share in the 13 weeks ended July 31, 2026, and raised its fiscal 2026 earnings range.
Dollar General Corporation (DG) raised its fiscal 2026 diluted earnings outlook to a range of approximately $7.80 to $8.00 from a prior expectation of $7.20 to $7.45 after a second quarter in which growth on every major operating line accelerated from the first quarter.
The company said the lift reflects strong first-half results and an improved outlook for the remainder of the year. Guidance includes an estimated benefit from tariff refunds, after related reinvestments, of about $0.25 in the second quarter and assumes an effective tax rate of about 24.5%. Dollar General does not anticipate a material impact from tariff refunds, after related reinvestments, in the second half of fiscal 2026.
Net sales in the 13 weeks ended July 31, 2026, increased 5.2% to $11.3 billion from $10.7 billion a year earlier. That year-over-year growth rate was faster than the 3.4% increase recorded in the first quarter. Same-store sales rose 3.5%, up from 2.0% in the prior quarter, on 2.0% growth in customer traffic and 1.5% growth in average transaction amount. Chief executive Todd Vasos said the quarter marked a fifth consecutive period of customer traffic growth and a sixth consecutive quarter of positive comparable sales in all four merchandising categories.
The company attributed the net sales increase to same-store sales and new stores, partially offset by closures. It opened 125 U.S. stores and one store in Mexico in the quarter, remodeled 665 stores through Project Renovate and 711 through Project Elevate, and relocated five. As of July 31, 2026, the chain counted 21,148 stores in the United States and Mexico.
Operating profit increased 29.2% to $769.2 million from $595.4 million a year earlier, a faster pace than the 10.8% rise in the first quarter. Gross profit as a percentage of net sales was 32.6%, compared with 31.3% a year earlier, a 127-basis-point expansion. The company said the increase was primarily attributable to tariff refunds, a lower LIFO provision, and lower distribution costs, partially offset by higher markdowns and transportation costs. It estimated the gross-margin benefit of tariff refunds, after related reinvestments, at about 81 basis points and the operating-margin benefit at about 66 basis points. Selling, general and administrative expenses were 25.8% of net sales, essentially unchanged from a year earlier.
Diluted earnings were $2.48 a share, up 33.3% from $1.86 a year earlier, including the estimated $0.25 tariff-refund benefit. Net income was $550.3 million, up 33.8% from $411.4 million. Net interest expense fell 25.7% to $42.9 million. The effective tax rate was 24.2%, compared with 23.5% a year earlier, which the company said was primarily due to expired federal tax credits, partially offset by a reduced state rate.
Merchandise inventories at cost were $6.6 billion as of July 31, 2026, down 2.7% on an average per-store basis from a year earlier. Cash and cash equivalents were $1.59 billion. In the 26 weeks ended July 31, 2026, cash flow from operations was $1.5 billion.
The board declared a quarterly cash dividend of $0.59 a share, payable on or before October 20, 2026. Dollar General intends to repurchase shares in the second half of the fiscal year ending January 29, 2027, with $1.4 billion remaining under its authorization at quarter-end. The company now expects share repurchases of up to $700 million for fiscal 2026.
For the full year, Dollar General now expects net sales growth of about 4.0% to 4.3%, compared with a prior range of 3.7% to 4.2%, and same-store sales growth of about 2.5% to 2.9%, compared with a prior range of 2.2% to 2.7%. It continues to expect capital expenditures of $1.4 billion to $1.5 billion and is reiterating plans for about 4,730 real estate projects in fiscal 2026, including about 450 new U.S. stores, about 10 new stores in Mexico, about 2,000 Project Renovate remodels, about 2,250 Project Elevate remodels, and about 20 relocations.