Dollar General (DG) investor relations material

Executive summary

• Net sales rose 5.9% to $10.9B in Q4 2025, with same-store sales up 4.3% and strong customer traffic growth; fiscal year net sales up 5.2% to $42.7B, driven by same-store sales and new store contributions.

• Market share increased in both consumable and non-consumable categories, with non-consumables outpacing consumables for the fourth consecutive quarter; all major categories posted sales growth in Q4 and FY25.

• Value offerings, especially $1 price point items, drove significant comp sales growth, with the Value Valley assortment up 17.6%.

• Digital and delivery initiatives expanded, contributing 80 basis points to Q4 comp sales growth.

• Strategic focus on four growth pillars: customer experience, brand elevation, enterprise efficiencies, and extending reach.

Financial highlights

• Q4 gross margin expanded 105 bps to 30.4%, driven by reduced shrink, higher markups, and lower damages; FY gross margin up 107 bps to 30.7%.

• Operating profit for Q4 increased 106% to $606M; EPS rose 122% to $1.93, exceeding expectations; annual net income rose 34.4% to $1.5B.

• Full-year operating cash flow up 21.3% to $3.6B.

• Merchandise inventories down 5.7% year-over-year to $6.3B; inventory at cost decreased 7.0% per store YoY.

• $1.7B in senior notes redeemed in 2025; quarterly dividend of $0.59 per share paid.

Outlook and guidance

• 2026 net sales growth expected at 3.7%-4.2%; same-store sales growth of 2.2%-2.7%; EPS guidance of $7.10-$7.35, assuming a 25% tax rate and a $0.13 negative impact from the expiration of the Work Opportunity Tax Credit.

• Capital spending planned at $1.4B-$1.5B; Q1 comp sales expected in low 2% range; plans for 450 new US stores, 10 in Mexico, and over 4,000 remodels/relocations.

• Gross margin expansion to continue, but at a slower pace; modest SG&A deleverage anticipated.

• No share repurchases planned for 2026.