Dive Brief:
- Dollar General’s third quarter net sales grew 4.6% year over year to $10.6 billion, per a Thursday release. Same-store sales increased 2.5% compared to the third quarter of 2024, reflecting a 2.5% increase in customer traffic and a flat average transaction amoun. Comparatively, Dollar Tree earlier this week reported comp sales growth driven by an increase in average ticket despite declining store traffic.
- The discount retailer’s net income jumped 43.8% to $282.7 million and gross profit grew 8.4% to $3.2 billion. Dollar General reiterated its plans to execute on over 4,800 real estate projects in fiscal year 2025, opening about 575 new stores in the U.S. and up to 15 locations in Mexico.
- Dollar General raised its full-year guidance, now expecting net sales growth in a range of approximately 4.7% to 4.9%, up from the previous 4.3% to 4.8%. The retailer also raised its same-store sales growth expectation to a range of 2.5% to 2.7% as opposed to the previous 2.1% to 2.6% estimate.
Dive Insight:
Similar to its competitor Dollar Tree, Dollar General saw customer growth with wealthier shoppers during the third quarter.
“We're pleased to see growth once again in our total customer count, with disproportionate growth coming from higher income households,” Dollar General CEO Todd Vasos told analysts on a Thursday call. “We remain focused on executing our proven playbook to retain a substantial portion of these customers, and with our unique combination of value and convenience, we believe we are well positioned to increase market share with customers across all income brackets.”
Same-store sales during the period featured growth in Dollar General’s consumables, seasonal, home products and apparel categories.
“A very solid set of results from Dollar General partly underlines the fact that Americans are turning to value retailers to get more bang for their buck,” GlobalData Managing Director Neil Saunders said in emailed comments. “There is now a mindset, especially for more frivolous occasions like Halloween, that it is not worth spending huge amounts of money on things like home decor and other fripperies – and this plays directly into the hands of retailers like Dollar General.”
As for the retailer’s traffic and basket trends, Vasos noted that this “composition is consistent with what we have historically observed when our core customer feels more pressured on their spending as they come in more often, but have smaller basket sizes.”
Looking forward, Dollar General plans to expand its fresh produce offerings to about 200 more stores in 2026, Vasos said. Additionally, a majority of the retailer’s new stores next year will be in its larger 8,500 square foot formats, predominantly in rural communities, which will allow for expanded offerings in categories such as health and beauty.
