Dollar General Stock Jumps on Earnings. It’s Been a Great Year for This Barron’s Pick.

Dollar General gained market share across consumables and non-consumables, CEO says. (Justin Sullivan/Getty Images)

Key Points

• Dollar General reported third-quarter earnings of $1.28 per share, exceeding estimates of 98 cents, with net sales of $10.6 billion.
• The company raised its fiscal-year earnings per share guidance to $6.30-$6.50 and same-store sales growth to 2.5%-2.7%.
• Dollar General stock increased 11.9% to $122.95, driven by strong earnings and market share gains across categories.

Dollar General stock rose Thursday after the low-cost retailer reported better-than-expected earnings and lifted its fiscal-year guidance.

The company posted earnings of $1.28 a share for its third quarter, well ahead of analysts’ consensus call for 98 cents, according to FactSet. Net sales totaled $10.6 billion, in line with estimates. Same-store sales increased 2.5% from the prior year.

The company gained market share across consumable and non-consumable categories during the quarter, CEO Todd Vasos said in a statement.

Dollar General stock climbed 11.9% to $122.95 Thursday morning, on track for its highest close since August 2024, according to Dow Jones Market Data. Shares have gained 58% since Barron’s Andrew Bary recommended buying the stock at the end of January.

Dollar General now expects per-share earnings of $6.30 to $6.50 for the fiscal year, up from a previous range of $5.80 to $6.30. Fiscal-year same-store sales were forecast to rise between 2.5% and 2.7%. The company previously had expected growth between 2.1% and 2.6%.

Management is effectively transitioning Dollar General into a mature retailer from a growth retailer, focusing on in-store enhancements and profitability, said analysts at Telsey Advisory Group. The firm reiterated its Market Perform rating and $123 price target for the shares in a research note. Investors should continue to monitor the broader economic backdrop, though, the analysts added.

“We remain constructive on Dollar General and are impressed with the performance, but still have concerns about the health of its core lower income consumer, increased competition, and macro factors, such as tariffs and inflation,” the Telsey analysts wrote.

On a call with investors Thursday, executives said low- and middle-income consumers are stretched and are being mindful about what they are shopping for. Indeed, much of the company’s growth this quarter came from higher-income households who have traded down to the dollar store channel as they, too, search for value.

The company highlighted that its efforts to improve the in-store experience by opening new stores and remodeling older ones helped improve sales and attract customers across the income spectrum. In 2026, Dollar General plans to open 450 new stores in the U.S. and renovate 2,000 stores.

“Near term, the story strengthens on operational leverage and improved cost efficiency,” wrote Corey Tarlowe, an analyst at Jefferies. “Longer term, store growth and remodel productivity provide visibility into sustained EPS growth.“

Dollar General’s beat-and-raise follows a strong earnings report from competitor Dollar Tree on Wednesday. Dollar Tree shares were up 5.3% after climbing 3.6% in Wednesday’s session, on track for its highest close since June 2024. Dollar Tree is up a little over 56% this year, on pace for its best year since 2010.

Write to Nate Wolf at nate.wolf@barrons.com