Dollar General Corporation

For Q1 2026, Dollar General reported net sales of $10.8 billion, up 3.4% year over year, and same-store sales growth of 2.0%, driven by 1.4% traffic growth and 0.5 point basket growth. Gross profit as a percentage of sales was 31.6%, up 65 basis points; SG&A was 25.7% of sales, up 25 basis points; operating profit increased 10.8% to $638.5 million, and EPS increased 12.4% to $2.00. Net interest expense fell to $47.2 million from $64.6 million, the effective tax rate was 24.9%, and operating cash flow was $716.2 million. For fiscal 2026, management now expects net sales growth of 3.7% to 4.2%, same-store sales growth of 2.2% to 2.7%, and EPS of $7.20 to $7.45, up from the prior range of $7.10 to $7.35. The company also reiterated a quarterly dividend of $0.59 per share for Q2 2026 and said share repurchases are not contemplated in the current guidance.

Todd Vasos struck a confident tone, saying the quarter showed the chain’s value-and-convenience proposition continues to resonate in a pressured consumer environment. He emphasized four straight quarters of traffic growth, broad-based comp gains across categories, and improving traction with trade-in customers, including those earning more than $100,000 annually. Strategically, he highlighted targeted promotions, the $1 price point, delivery expansion, remodels, and digital investments as the main levers supporting growth.

Donny Lau focused on margin execution and financial flexibility. He said gross margin expansion to 31.6% came from higher markups, lower shrink, and lower damages, partially offset by markdowns and transportation costs; shrink improved by 28 basis points versus prior year, even after lapping a 61 basis point improvement in Q1 2025. He also pointed to $638.5 million of operating profit, $716.2 million of operating cash flow, inventories of $6.6 billion that were essentially flat year over year, and a capital allocation framework centered on investing in the business, paying the dividend, and buying back shares when appropriate while maintaining less than 3x debt to adjusted EBITDAR.

Analysts pressed on whether stronger comps were being driven by more promotions, whether higher fuel prices could pressure results, and how much incremental lift delivery and the $1 price point can still provide. Management said promotions were planned and targeted rather than reactive, and that elevated gas prices historically push more trade-in traffic toward Dollar General. They also said delivery remains highly incremental and profitable, with about 70 basis points of Q1 comp contribution, and that a subscription pilot is planned later this year.