Dollar General's Q1 Earnings Exceed Expectations: Strong Sales Growth and Category Expansion
Dollar General, one of the largest discount retailers in the United States, has reported strong sales growth for its first quarter of 2025. In a recent conference call, the company's CEO, Todd Vasos, shared the highlights of their Q1 performance, which exceeded expectations on both the top and bottom lines.
The company's net sales increased by 5.3% to $10.4 billion in Q1 compared to last year's first quarter, driven by the opening of 156 new stores during the period. Dollar General also continued to grow market share in both dollars and units in highly consumable product sales, as well as in non-consumable product sales.
A significant contributor to this growth was a 2.4% increase in same-store sales, with customer traffic slightly decreasing by 0.3% during the quarter. However, this decrease did not dampen the company's enthusiasm, as it remained strong on a 2-year stack basis, lapping the 4.3% traffic increase from the prior year's first quarter.
The company was particularly pleased to see broad-based category growth during the quarter, with positive comp sales in each of their consumables, seasonal home, and apparel categories. The seasonal and home categories even managed to maintain a 3% or higher rate of comp sales during the period.
Dollar General's non-consumable product categories also resonated well with customers, particularly for the Easter and early spring seasons. This was led by April, which benefited from the later Easter compared to the prior year. The company believes that these top-line results are a testament to their improved execution, as well as the value-seeking behavior of customers across multiple income bands.
In terms of pricing, Dollar General continues to feel good about its everyday low price position relative to other competitors and classes of trade. Their goal is to be priced within 3 to 4 percentage points of mass on average, which they achieved by the end of Q1.
Furthermore, the company remains committed to carrying at least 2,000 SKUs at or below the increasingly rare $1 price point as they aim to help customers stretch their dollars. This strategy seems to be working well for Dollar General, with its efforts resonating with a wide range of customers across the country."
