On June 3, Telsey analysts increased their price target for Dollar General Corporation (NYSE:DG) to $120 from $100 while maintaining a ‘Market Perform’ rating. The basis for the revision is the retailer’s better-than-expected Q1 FY2025 earnings results and updated guidance.
During the quarter, Dollar General posted $1.78 in adjusted earnings per share (EPS). This EPS beats Telsey’s estimate of $1.49 and the FactSet consensus of $1.48. Comparable sales rose 2.4%, also exceeding Telsey’s projection of 1.0% and FactSet’s 1.5%. The operating margin also surpassed both Telsey’s and FactSet’s forecasts—it reached 5.5%, against Telsey’s 4.8% and FactSet’s 4.7%.
The company posted the figures even when, according to internal calculations, core lower-income customers face spending constraints. Dollar General said it is attracting increased visits and spending from middle- and higher-income households. New customers are making more frequent trips and purchasing additional discretionary items. Furthermore, the retailer’s market share expanded in both consumables and non-consumables, supported by value positioning and merchandising initiatives.
Additional details show that traffic declined 0.3% in Q1 FY2025, but showed a 4% increase on a two-year stacked basis. The company reported positive traffic in early Q2 2025, with growth across all key categories and months. Dollar General attributed April’s strength to Easter timing and expressed optimism about May’s performance, including positive traffic trends.
Dollar General Corporation is an American chain of discount retail stores. The Goodlettsville, Tennessee-headquartered retailer operates over 19,600 stores across the United States and Mexico. It offers low-cost household essentials, groceries, apparel, and seasonal products.
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