Dollar General underwhelms with FY guidance as stock pulls back

(Sharecast News) - Dollar General underwhelmed the market on Thursday with in-line guidance for the current year, with futures falling sharply in pre-market trading as investors booked profits following a strong rally in the stock over the past year. The American discount retailer, which operates from over 20,000 stores across the US and Mexico, beat analysts' forecasts with its fourth-quarter results, reporting a 5.9% increase in quarterly net sales to $10.91bn for the three months to 30 January, compared with the $10.81bn estimate.

Same-store sales were 4.3% higher than the year before, comfortably beating the 3.5% consensus forecast.

Operating profits were up 106.1% at $606.3m, with per-share earnings of $1.93 well ahead of the $1.66 market estimate.

As a result, full-year net sales were 5.2% higher than 2024 at $42.7bn, with same-store sales up 3.0%, while annual operating profit jumped 28.6% to $2.2bn.

"Our fourth quarter performance was highlighted by a 4.3% increase in same-store sales and continued advancement of our key initiatives, which contributed to strong operating margin expansion and EPS growth that well exceeded our expectations," said chief executive Todd Vasos.

"Looking ahead to 2026, we are excited about our plans to drive continued growth through a variety of initiatives designed to further enhance the customer experience, elevate our brand, drive greater enterprise-wide efficiencies, and extend our reach, all while creating long-term shareholder value."

The company guided to net sales growth of between 3.7% to 4.2% for the fiscal year ending January 2027, with same-store sales growth of between 2.2% and 2.7%. That was broadly in line with the consensus forecasts of 3.9% and 2.5%.

However, Dollar General futures were down 5.1% at $137.51 in pre-market trade on Thursday.

The share price has fallen since the start of the month - down 7.3% as of Wednesday's close - pulling back after more than doubling over the past 12 months, having recently topped the $150 mark for the first time since early 2024.