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%.

• Diluted EPS increased 43.8% to $1.28, and net income rose to $282.7 million, with operating profit up 31.5% to $425.9 million.

• Gross profit margin improved by 107 basis points to 29.9%, mainly due to higher inventory markups and lower shrink.

• Digital and delivery initiatives, including partnerships and expanded same-day home delivery, contributed to larger basket sizes and higher customer incrementality.

• Inventory optimization and SKU rationalization led to lower shrink and improved gross margin.

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 an 8.2% decrease per store.

• SG&A as a percentage of sales rose 25 basis points to 25.9%, mainly due to higher incentive compensation and maintenance costs.

• Inventory turnover improved to 4.4 from 4.0 year-over-year.

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 for 2025.

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

• Additional $550 million in senior notes to be redeemed ahead of maturity.

• Long-term framework targets 2%-3% comp growth and margin expansion.