Dollar General's stock drops, as sales growth to slow more than expected

By Tomi Kilgore

Off-price retailer gives downbeat outlook for same-store sales in the current quarter due to 'severe' storms in February

Dollar General's stock falls after a quarterly earnings beat, as the outlook for a key sales metric disappointed.

Shares of Dollar General were headed toward their biggest selloff in nearly two years Thursday, after the off-price retailer provided a downbeat sales outlook, with growth in 2026 set to slow for the first time in four years.

The downbeat outlook overshadowed strong fiscal fourth-quarter results, in which same-store sales, or sales of stores open at least 13 months, grew at the fastest rate in three years. That's because traffic to Dollar General stores increased, across all income brackets, and higher prices helped boost the average size of each basket.

What also helped sales in the latest quarter to Jan. 30 was people stocking up goods ahead of winter storms. And what hurt the same-store sales outlook was "severe winter storm activity" in February, which led to store closures.

The stock (DG) sank 5.4% in recent morning trading toward a two-month low, and to put it on track to snap a five-quarter streak of post-earnings gains. The selloff was also weighing on shares of rival Dollar Tree (DLTR), which were down 1.6% and also at a two-month low. Dollar Tree is scheduled to release fourth-quarter results on March 16.

For the quarter to Jan. 30, Dollar General said same-store sales increased 4.3% from a year ago, the fastest year-over-year growth since the quarter that ended in January 2023. That beat the average analyst estimate compiled by FactSet for growth of 3.5%.

Encouraging were the 2.6% increase in customer traffic and 1.7% increase in the average transaction. The company saw growth in consumables, which includes groceries, and in discretionary categories such as seasonal, home products and apparel.

After a strong finish to the year, fiscal 2025 same-store sales rose 3%, the third straight year of accelerating growth.

But fiscal 2026 had a weaker start, with the company saying in the post-earnings call with analysts that same-store sales for the current quarter is seen up in the low 2% range, while the FactSet consensus is for a 2.7% rise.

For the full year, the company expects same-store sales growth to decelerate to between 2.2% and 2.7%, with the midpoint of that range slightly below the current FactSet consensus of 2.5%.

The company also reported quarterly net sales that rose 5.9%, to $10.91 billion, beating the FactSet consensus of $10.81 billion. For fiscal 2025, sales increased 5.2%, to $42.72 billion. For fiscal 2026, the company expects sales to increase 3.7% to 4.2%.

Earnings per share for the fourth quarter more than doubled, to $1.93 from 87 cents, and were well above the FactSet EPS consensus of $1.66. For 2026, the company expects EPS of $7.10 to $7.35, the midpoint of which is slightly below current analyst expectations of $7.25.

The stock has gained 3.2% in 2026, and has soared 83% over the past 12 months. In comparison, the S&P 500 index SPX has slipped 2.4% this year and advanced 19.3% over the past year.

-Tomi Kilgore

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03-12-26 1117ET