The stock of Dollar General (DG) is up 12% after the discount retailer delivered financial results and guidance that exceeded Wall Street’s expectations.
The Tennessee-based retail chain reported earnings per share (EPS) of $2.48 U.S., which topped analysts’ consensus estimates of $2.01 U.S.
Revenue in the second quarter totaled $11.30 billion U.S., which was just ahead of Wall Street forecasts that called for $11.20 billion U.S. Sales were up 5.2% from a year earlier.
The company also raised its forward guidance. Management said they now expect a full-year profit of $7.80 U.S. to $8 U.S. per share and sales growth of 4% to 4.3%.
Dollar General previously forecast earnings of $7.20 U.S. to $7.45 U.S. a share and sales growth of 3.7% to 4.2% for this year.
Wall Street had a profit of $7.40 U.S. penciled in for the company.
Dollar General’s financial results benefitted from increased traffic at its stores among price-conscious consumers who are searching for deals.
Lower income consumers continue to struggle with rising prices due to tariffs and inflation, as well as a slowing U.S. economy.
Dollar General is the largest dollar store chain in America and has traditionally sold more essential items, or consumer staples, than discretionary products.
The company is increasingly seen as a competitor of larger discount retailers such as Walmart (WMT) and Target (TGT).
Prior to today (Aug. 27), DG stock had risen 10% over the last 12 months to trade at $122.78 U.S. per share.
