Dollar General (DG) Q2 2026 earnings summary

Executive summary

• Net sales rose 5.1% year-over-year to $10.73 billion in Q2 2025, driven by new and mature store performance, same-store sales growth, and broad-based category gains.

• Same-store sales increased 2.8%, with balanced growth in customer traffic and average basket, and gains across all major categories.

• Net income grew 10% to $411.4 million, and diluted EPS rose 9.4% to $1.86, surpassing expectations.

• The company opened 204 new stores, remodeled 1,321 stores, and closed 40 stores in the quarter.

• Full-year financial guidance was raised, reflecting strong Q2 performance and an improved outlook.

Financial highlights

• Gross profit margin improved by 137 basis points to 31.3%, mainly due to lower shrink, higher inventory markups, and reduced damages.

• Operating profit increased 8.3% to $595.4 million, with operating margin up to 5.55%.

• Net interest expense decreased to $57.7 million, and effective tax rate rose to 23.5%.

• Merchandise inventories declined 5.6% to $6.6 billion, with a 7.4% decrease per store.

• Cash flow from operations rose 9.8% to $1.8 billion in the first half.

Outlook and guidance

• Fiscal 2025 guidance: net sales growth of 4.3%-4.8%, same-store sales growth of 2.1%-2.6%, and EPS of $5.80-$6.30, with a 23.5% tax rate.

• Capital spending expected at $1.3-$1.4 billion, supporting 4,885 real estate projects, including 575 new U.S. stores and up to 15 in Mexico.

• No share repurchases assumed in guidance to preserve investment grade rating.

• Shrink reduction expected to remain a tailwind, though less pronounced in Q4.

• Promotional environment and inflationary pressures expected to persist.