Latest quarter
Dollar General reported Q2 FY2027 revenue of $11.3 billion, compared with the consensus of $11.2 billion; revenue as the consensus counts it was ahead by 1.00%. The company reported adjusted EPS, as the consensus counts it, of $2.23, versus the consensus of $2.00, or 11.5% above the consensus.
The filing shows revenue increased 5.24% from $10.7 billion in Q2 FY2026, while diluted EPS rose 33.3% from $1.86 to $2.48. Dollar General said the sales increase reflected a 3.5% same-store-sales increase and sales from new stores, partly offset by store closures; customer traffic increased 2.0% and average transaction amount increased 1.5%. The company said all four merchandise categories posted higher same-store sales.
Dollar General reported gross margin of 32.6%, up 1.3 percentage points from 31.3%, citing tariff refunds, a lower LIFO provision and lower distribution costs, partly offset by markdowns and transportation costs. Operating margin was 6.81%, compared with 5.55%. Free cash flow was $374.0 million, versus $566.6 million a year earlier.
| Q2 FY2027 | Q2 FY2026 | Change | |
|---|---|---|---|
| Revenue | $11.3 billion | $10.7 billion | 5.24% |
| Diluted EPS | $2.48 | $1.86 | 33.3% |
| Gross margin | 32.6% | 31.3% | 1.3 percentage points |
| Operating margin | 6.81% | 5.55% | 1.3 percentage points |
| Free cash flow | $374.0 million | $566.6 million | −34.0% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $2.23 | $2.00 | Beat by 11.5% |
| Revenue | $11.3 billion | $11.2 billion | Beat by 1.00% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
Chief Executive Officer Todd Vasos said Dollar General’s core customers remained financially constrained by inflation and volatile fuel prices, while the company continued to see customers from middle- and higher-income groups shop its stores. He said customers reduced trips and shopped closer to home, and that the company used everyday prices, targeted promotions and its $1 assortment to address demand.
Vasos said same-store sales grew across all four merchandise categories and that non-consumable sales growth outpaced consumables. He said delivery contributed an estimated 40 basis points to comparable-sales growth in Q2 and that the company’s delivery offerings brought new customers into its stores. Chief Operating Officer Emily Taylor said delivery was ahead of the company’s internal plan, had stable incrementality, and produced a higher average basket than in-store purchases.
When analysts asked about promotional activity and pricing, Vasos said Dollar General did not see a meaningful step-up in promotions and had invested in everyday prices as well as holiday promotions. He said the company was positioned against other classes of trade through pricing, promotional cadence and $1 offerings, without quantifying future promotional spending.
Chief Financial Officer Donnie Lau said gross margin benefited from tariff refunds after reinvestment, lower LIFO expense and lower distribution costs, while transportation costs were higher than expected. Lau said the company expects continued improvements from shrink and damages, supply-chain efficiencies, non-consumable merchandising, its media network and category management; he also said fuel costs would remain elevated for the balance of the year.
Vasos said Dollar General opened 125 U.S. stores in Q2 and continued remodeling activity through Project Renovate and Project Elevate. Lau said the company planned to resume share repurchases in the third quarter and expected inventory to grow more slowly than sales for fiscal 2026. Vasos also told analysts that the fourth quarter faces a comparison with the prior-year benefit from winter storms.
Guidance
Dollar General raised its fiscal 2026 outlook for net sales growth to 4.00% to 4.30%, from its prior expectation of 3.7% to 4.2%. The company raised its same-store-sales outlook to 2.50% to 2.90%, from 2.2% to 2.7%, and raised diluted EPS guidance to $7.80 to $8.00, from $7.20 to $7.45. The company continued to expect capital expenditures of $1.4 billion to $1.5 billion and share repurchases of up to $700.0 million.