10-QPeriod: Q2 FY2027

DOLLAR GENERAL CORP Quarterly Report for Q2 Ended May 1, 2026

Filed June 2, 2026For Securities:DG

Summary

Dollar General Corporation (DG) reported solid performance for the first quarter ended May 1, 2026, with net sales increasing by 3.4% to $10.79 billion. This growth was driven by a 2.0% increase in same-store sales, fueled by a 1.4% rise in customer traffic and a modest 0.5% increase in average transaction amount. The company's gross profit rate improved by 65 basis points to 31.6%, attributed to better inventory markups and reduced shrink/damages, partially offset by higher transportation costs. Net income saw a healthy 13.3% increase to $444.1 million, resulting in diluted earnings per share of $2.00. The company continues to focus on its long-term operating priorities, including driving profitable sales growth, capturing growth opportunities through strategic initiatives like digital tools and store remodels, and maintaining its position as a low-cost operator. Significant investments are planned for new store openings, remodels, and technology upgrades in fiscal year 2026, with capital expenditures projected between $1.4 billion and $1.5 billion. Despite ongoing macroeconomic pressures impacting its value-conscious customer base, DG appears well-positioned to navigate these challenges by focusing on its core value proposition and operational efficiencies.

Financial Highlights

41 data points
Beta

Revenue

$10.79B

31.6% Gross Margin

Net Income

$444.13M

4.1% Net Margin

EPS (Diluted)

$2.00

Total Assets

$31.70B

Cash & Equivalents

$1.35B

Free Cash Flow

$716.19M

Financial Statements
Beta
Revenue$10.79B
Cost of Revenue$7.38B
Gross Profit$3.41B
SG&A Expenses$2.77B
Operating Income$638.52M
Net Income$444.13M
EPS (Basic)$2.02
EPS (Diluted)$2.00
Shares Outstanding (Basic)220.35M
Shares Outstanding (Diluted)221.56M

Key Highlights

  • 1Net sales increased 3.4% to $10.79 billion for the first quarter.
  • 2Same-store sales grew by 2.0%, driven by a 1.4% increase in customer traffic.
  • 3Gross profit margin expanded by 65 basis points to 31.6% due to improved inventory management and reduced shrink.
  • 4Net income rose by 13.3% to $444.1 million, with diluted EPS at $2.00.
  • 5Company plans significant capital expenditures of $1.4 billion to $1.5 billion for FY2026, focusing on new stores, remodels, and technology.
  • 6Inventory levels were managed effectively, with total merchandise inventories increasing 5% for the period.
  • 7The company continues to manage potential risks from inflation, tariffs, and regulatory changes, while emphasizing its low-cost operator strategy.

Frequently Asked Questions

The primary driver of Dollar General's sales growth was a combination of new store openings and a 2.0% increase in same-store sales. The same-store sales growth was itself fueled by a 1.4% increase in customer traffic and a 0.5% increase in the average transaction amount.

Dollar General improved its gross profit margin by 65 basis points to 31.6%. This improvement was primarily due to higher inventory markups and lower shrink and damages. These gains partially offset increased markdowns and transportation costs.

Dollar General is focused on several strategic initiatives for growth, including driving profitable sales through digital tools and technology (like the Dollar General app and delivery services), enhancing mature stores via remodels (Project Renovate and Project Elevate), opening new stores in strategic formats, and exploring new concepts like pOpshelf. They also aim to capture growth opportunities through improved merchandising and global sourcing strategies.

For fiscal year 2026, Dollar General anticipates capital expenditures between $1.4 billion and $1.5 billion, primarily for new store openings, remodels, and technology investments. The company maintained its quarterly cash dividend at $0.59 per share and has a substantial common stock repurchase program authorization of approximately $1.38 billion available, although repurchases have been paused since 2022 to maintain financial flexibility and credit ratings.