Dollar General set a quarterly sales record and upgraded its annual profit and sales outlook as Americans tighten their budgets and spend more at bargain stores amid economic uncertainty. The US economy shrank at a 0.2% annual pace from January through March, the first drop in three years, as President Trump's trade wars dented spending by businesses. Consumer spending slowed sharply. But for the period ended May 2, Dollar General's sales climbed 5%, to $10.44 billion from $9.91 billion, per the AP. That's better than the $10.29 billion that Wall Street was expecting, according to a poll by Zacks Investment Research.
Sales at stores open at least a year, a key indicator of a retailer's health, increased 2.4%. Customer traffic dipped 0.3%, but the average transaction amount rose 2.7%. Shares jumped more than 10% before the opening bell on Tuesday, and shares of rival Dollar Tree, which reports its quarterly performance on Wednesday, rose 4%. Dollar General, based in Goodlettsville, Tennessee, earned $391.9 million, or $1.78 per share, in the quarter, blowing past the $1.47 per share that Wall Street had expected, as well as the $363.3 million profit it recorded during the same period last year.
Dollar General said that even though it topped its own expectations, there's a lot of uncertainty about how tariffs will impact its business and its customers for the remainder of the year. The company is now projecting 2025 earnings in a range of about $5.20 to $5.80 per share, adjusted from the prior earnings forecast for approximately $5.10 to $5.80 per share. Sales are expected to climb approximately 3.7% to 4.7%; Dollar General previously predicted sales growth of about 3.4% to 4.4%. Same-store sales growth is now expected to be approximately 1.5% to 2.5%, up from a prior outlook for about 1.2% to 2.2% growth.
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