Dollar General Q2 Profit Jumps 34%, Stock Surges 10% as Full-Year Outlook Raised Sharply

Dollar General reported second-quarter earnings per share of $2.48, beating the consensus estimate of $2.00 by $0.48 and rising 33.3% year over year. Net sales reached $11.29 billion, up 5.2% from a year ago and above the $11.19 billion estimate, while net income climbed 33.8% to $550.3 million. Same-store sales grew 3.5%, driven by a 2.0% increase in customer traffic and a 1.5% rise in average transaction size.

Operating profit surged 29.2% to $769.2 million, and gross margin expanded 127 basis points to 32.6%, with tariff refunds contributing roughly 81 basis points of that improvement net of reinvestments. Revenue gains were broad-based: consumables rose 5.0% to $9.26 billion, seasonal climbed 7.4% to $1.19 billion, home products gained 4.8% to $0.54 billion, and apparel increased 4.5% to $0.30 billion. On the strength of those results, Dollar General raised its full-year 2026 guidance significantly.

It now expects diluted EPS of $7.80 to $8.00, up from a prior range of $7.20 to $7.45, against a Street estimate of roughly $7.39. Full-year net sales growth guidance was lifted to approximately 4.0% to 4.3% from 3.7% to 4.2%, and comparable-store sales growth guidance rose to approximately 2.5% to 2.9% from 2.2% to 2.7%. The company also authorized up to $700 million in share repurchases and declared a quarterly dividend of $0.59 per share.

Capital expenditures for full-year 2026 are expected in the range of $1.4 billion to $1.5 billion. The WSJ noted that Dollar General is gaining market share as inflation-weary shoppers flock to its stores for low-cost goods, a trend reinforced by July PCE inflation coming in at 3.7% year over year, above the 3.6% forecast. Shares jumped as much as 10% in premarket trading and were up approximately 5% by late afternoon, outperforming rival Dollar Tree, which slipped roughly 3% despite also beating estimates and raising its own outlook.