Jim Cramer Notes “Dollar General (DG) Only Imports 4% of Its Goods Directly from Foreign Manufacturers”

We recently published a list of Jim Cramer Put These 14 Stocks Under the Microscope. In this article, we are going to take a look at where Dollar General Corporation (NYSE:DG) stands against other stocks that Jim Cramer discusses.

Comparing the difference between Dollar General Corporation (NYSE:DG) and Dollar Tree, Cramer said:

“Discount retailers tend to do better when the consumers’ feeling stretched thin, and you know the consumer’s feeling that way. But Dollar General and Dollar Tree have behaved very differently after reporting earnings over the past couple days. When Dollar General announced its results yesterday and the numbers were excellent, the stock caught fire…

… The difference between these two comes down to what they had to say about their ability to control costs and offset the impact of, you bet, go ahead, the president’s tariffs… Unfortunately, we’re also in the middle of some volatile trade negotiations. President’s tariffs are potentially hurting their ability to keep prices low, and this is why Dollar General soared yesterday and Dollar Tree plummeted today, because Dollar Tree seems to have trouble, let’s say, more trouble with the tariffs.

At Dollar General, management remains confident they’ll be able to navigate these challenges by pulling a few levers, negotiating cost concessions with their vendors, shifting manufacturing to other countries when possible, or even just finding substitute products made in places where the tariffs are lower. While management’s confident this can work, they do expect the tariffs to result in some price increases as a last resort…

While both companies source some of their merchandise from overseas, especially from China, there’s a major difference in how much each company imports directly. See, Dollar General only imports 4% of its goods directly from foreign manufacturers. For Dollar Tree, it’s 40%…

… So let me give you the bottom line: While both these companies might have the word dollar in their names, the subtle differences in their supply chain structure are having a huge impact on their stocks. That’s why Dollar General soared yesterday, and Dollar Tree is now in the [house of pain]. And it’s why you should watch out for the distinction between direct imports and indirect imports in the rest of retail because going forward, it’s really going to matter.”

A busy shopping aisle filled with discounted items in a retail store.

Dollar General (NYSE:DG) is a discount retailer that sells a broad mix of products. The company’s selection includes everyday consumables, packaged and perishable foods, health and beauty items, pet products, seasonal merchandise, home goods, and clothing for all age groups.

Overall, DG ranks 7th on our list of stocks that Jim Cramer discusses. While we acknowledge the potential of DG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.