10-QPeriod: Q2 FY2027

DOLLAR GENERAL CORP Quarterly Report for Q2 Ended Jul 31, 2026

Filed August 27, 2026For Securities:DG

Summary

Dollar General Corporation (DG) reported its second-quarter results for the fiscal year 2026, showcasing a 5.2% increase in net sales to $11.29 billion for the thirteen weeks ended July 31, 2026, compared to the same period last year. This growth was driven by a 3.5% increase in same-store sales, attributed to a 2.0% rise in customer traffic and a 1.5% increase in average transaction amount. For the twenty-six weeks ended July 31, 2026, net sales grew 4.3% to $22.08 billion, with same-store sales increasing by 2.7% driven by a 1.7% rise in customer traffic and a 1.0% increase in average transaction amount. The company reported a significant improvement in profitability, with diluted earnings per share rising 33.3% to $2.48 for the thirteen-week period and 23.4% to $4.49 for the twenty-six week period. This was fueled by a substantial 9.5% increase in gross profit for the quarter and 7.6% for the half-year, largely due to tariff refunds, lower LIFO provisions, and reduced distribution costs, which more than offset increased markdowns and transportation costs. Despite rising operating expenses as a percentage of sales, the company's overall financial performance demonstrates resilience in a challenging economic environment, with a continued focus on value for its price-conscious customer base.

Key Highlights

  • 1Net sales increased by 5.2% to $11.29 billion for the 13-week period and 4.3% to $22.08 billion for the 26-week period, driven by same-store sales growth and new store openings.
  • 2Same-store sales increased by 3.5% for the 13-week period and 2.7% for the 26-week period, supported by higher customer traffic and an increased average transaction amount.
  • 3Diluted EPS saw significant year-over-year growth, rising 33.3% to $2.48 for the 13-week period and 23.4% to $4.49 for the 26-week period.
  • 4Gross profit margin improved by 127 basis points to 32.6% for the quarter, primarily due to tariff refunds, lower LIFO provision, and reduced distribution costs.
  • 5The company ended the period with strong liquidity, reporting $1.59 billion in cash and cash equivalents and $2.375 billion in borrowing availability under its revolving credit facility.
  • 6Dollar General plans to open approximately 450 new stores and remodel approximately 4,730 stores in fiscal year 2026, indicating continued investment in physical expansion.
  • 7The company anticipates resuming share repurchases in the second half of fiscal year 2026, signaling a return to capital return initiatives.

Frequently Asked Questions

Dollar General reported a 5.2% increase in net sales, reaching $11.29 billion for the thirteen weeks ended July 31, 2026. This growth was primarily driven by a 3.5% increase in same-store sales, which was a result of a 2.0% rise in customer traffic and a 1.5% increase in the average transaction amount.

The company demonstrated improved profitability, with diluted earnings per share increasing by 33.3% to $2.48 for the thirteen-week period and by 23.4% to $4.49 for the twenty-six week period. This improvement was supported by a stronger gross profit margin, which increased by 127 basis points to 32.6% for the quarter, aided by factors such as tariff refunds and lower operating costs.

Dollar General plans to continue its physical expansion by opening approximately 450 new stores and remodeling approximately 4,730 stores in fiscal year 2026. They are also focusing on optimizing their sales mix, enhancing their position as a low-cost operator, and investing in their employees. Initiatives like digital tools, store remodels (Project Renovate and Project Elevate), and the pOpshelf concept are key components of their growth strategy.

Dollar General is actively managing its inventory balances, with total merchandise inventories increasing 3% year-over-year for the 26-week period, while on a per-store basis, inventories decreased by 2.7%. Cost management includes initiatives for shrink and damage reduction, pricing and markdown optimization, and improving distribution and transportation efficiencies. Despite facing inflationary pressures and increased transportation costs, the company achieved a higher gross profit rate due to tariff refunds and cost control measures.