Dollar General lifts guidance after first-quarter sales top expectations

Investing.com - Dollar General has reported first-quarter net sales and earnings that topped Wall Street estimates, leading the budget retailer to lift its full-year financial guidance despite lingering uncertainty over the impact of sweeping U.S. tariffs.

Like many retailers, Dollar General (NYSE: DG) previously outlined a relatively cautious approach to the coming months, as companies attempt to assess the effect of the levies on customer behavior. Economists have warned that the duties could drive up inflationary pressures and weigh on broader growth.

But Dollar General said on Tuesday that, following outperformance in its most recent quarter, it expects that it will be able to mitigate a significant portion of the tariffs at their current rates. Consumer expenditures could face headwinds from levy-related price increases, however, the firm warned.

Still, assuming that the current tariff rates remain in place through mid-August, net sales are tipped to grow between 3.7% to 4.7% in its 2025 fiscal year, up from a prior expectations of around 3.4% 4.4%. Same store sales are seen increasing by around 1.5% to 2.5%, versus earlier guidance of 1.2% to 2.2%.

Diluted earnings per share is anticipated to come in at $5.20 to $5.80. Dollar General had previously called for approximately $5.10 to $5.80.

The updated guidance also reflects plans by Dollar General to address a possible cooling in a trade spat between the U.S. and China, the group added.

For the quarter ended on May 2, net sales rose by 5.3% year-over-year to $10.44 billion, above Bloomberg consensus estimates of $10.28 billion.

Operating profit also increased 5.5% to $576.1 million, topping projections of $489.8 million. Earnings per share edged up to $1.78 from $1.65 a year earlier.

Shares in Dollar General spiked in premarket U.S. trading.

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