Dollar General (DG) Q3 2026 earnings summary

Executive summary

• Net sales for Q3 2025 rose 4.6% year-over-year to $10.65 billion, driven by new store openings and a 2.5% same-store sales increase, with customer traffic up 2.5%.

• Operating profit increased 31.5% to $425.9 million, and diluted EPS surged 43.8% to $1.28, exceeding expectations.

• Gross profit margin improved by 107 basis points to 29.9%, primarily due to higher inventory markups and lower shrink, partially offset by higher LIFO provision.

• Market share gains were achieved in both consumable and non-consumable categories, with notable growth from higher-income households.

• Leadership changes included the promotion of Emily Taylor to COO and the return of Donny Lau as CFO.

Financial highlights

• For the 39 weeks ended October 31, 2025, net sales grew 5.0% to $31.81 billion, and net income increased 16.3% to $1.09 billion.

• Year-to-date cash flows from operations increased 28.4% to $2.8 billion.

• Merchandise inventories declined 6.5% to $6.7 billion, with inventory turnover improving to 4.4 from 4.0 year-over-year.

• Net interest expense decreased to $55.9 million from $67.8 million year-over-year.

• No shares were repurchased during the period; $389.6 million in dividends were paid.

Outlook and guidance

• Fiscal 2025 guidance: net sales growth of 4.7%-4.9%, same-store sales growth of 2.5%-2.7%, and EPS of $6.30-$6.50.

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

• No share repurchases are planned for 2025 to preserve investment grade credit rating.

• Long-term framework targets remain on track, with further details on 2026 to be provided in the next earnings call.