Ahead of Dollar General's Q1 fiscal 2025 earnings release, analysts expect revenue to increase 3.8% year-over-year to $10.29 billion, but EPS is projected to decline 10.9% to $1.47. Despite strategic initiatives like DG Fresh and DoorDash partnerships expected to drive sales, the company faces near-term margin pressure from higher labor costs and remodeling expenses; shares have rallied 35.3% in the last three months, outperforming its industry.
Dollar General (DG) is poised to report its first-quarter fiscal 2025 results with consensus estimates projecting a 3.8% year-over-year revenue increase to $10.29 billion, yet a significant 10.9% decline in EPS to $1.47. This anticipated top-line growth is attributed to strategic initiatives such as DG Fresh, SKU rationalization, private-label expansion, a partnership with DoorDash, and proactive pricing, which are expected to drive foot traffic and a projected 0.8% increase in same-store sales. However, the company faces considerable near-term margin pressure stemming from increased labor costs and expenses related to store remodeling, leading to an expected 90 basis point deleverage in SG&A expenses and a 70 basis point contraction in operating margin. Despite these profitability challenges, DG's shares have rallied 35.3% over the past three months, significantly outperforming its industry and key competitors. The stock currently trades at a forward P/E of 16.84, a discount to the industry average but above its own one-year median, and the Zacks model indicates a likelihood of an earnings beat with a positive Earnings ESP of +2.64% and a Zacks Rank #3 (Hold), although the company has a trailing four-quarter average negative earnings surprise of 1.2%.
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