### Dollar General Raises Annual Targets Amid Strong Sales Performance

Dollar General has increased its annual financial targets after surpassing expectations for quarterly profit and same-store sales, the company announced on Tuesday. The forecast improvement led to a 14% rise in the company's shares, standing in contrast to other retailers who have been reducing their financial outlooks due to ongoing tariff uncertainties and persistent inflation.

During a post-earnings call, Dollar General CEO Todd Vasos highlighted that while the company’s core lower-income consumers remain financially strained, there has been an increase in middle- and higher-income shoppers, marking the highest turnout from these groups in four years. Historically, dollar stores have managed to thrive under tough economic conditions, drawing budget-conscious consumers seeking cheaper goods.

Efforts to stock more consumables and everyday essentials, alongside store revamps, have enabled Dollar General to compete effectively against larger retailers like Walmart. Analyst Scot Ciccarelli from Truist Securities noted this quarter as Dollar General’s best since the early pandemic, even though there were minor concerns about traffic declines and price-boosted sales tickets.

Since the beginning of the year, Dollar General’s stock has climbed approximately 28%, weathering the fluctuations in global markets influenced by tariffs. The company now forecasts annual same-store sales growth between 1.5% and 2.5%, up from the previous estimate range of 1.2% to 2.2%. Additionally, Dollar General increased the low end of its annual earnings per share target by 10 cents, now expecting earnings to fall between $5.20 and $5.80 per share.

Dollar General has also made strategic adjustments to reduce reliance on Chinese imports, cutting the proportion of its private-label goods sourced from China to about 70%. Despite this, the company remains vigilant regarding the potential impact of tariffs on its costs.

In the three months ending on May 2, the Tennessee-based retailer saw a 2.4% increase in same-store sales, surpassing the anticipated 1.41% rise according to LSEG data. Earnings per share for the first quarter reached $1.78, significantly beating the Street's forecast of $1.48.

However, Dollar General acknowledged the ongoing uncertainty fueled by tariffs for the remainder of the year, projecting potential pressures on consumer spending due to tariff-induced price hikes. Meanwhile, rival Dollar Tree, which recently sold the Family Dollar chain, is set to announce its first-quarter results on Wednesday.