Shares of Dollar General Corp (NYSE:DG) are trading slightly lower on Wednesday, after the company reported its first-quarter results on Tuesday.
Here are some key analyst takeaways:
- Loop Capital Markets analyst Anthony Chukumba maintained a Hold rating, while raising the price target from $110 to $115.
- Guggenheim Securities analyst John Heinbockel reiterated a Buy rating on the stock.
Check out other analyst stock ratings.
Loop Capital Markets: Dollar General's performance was particularly impressive, given that it faced adverse weather, rising gas prices, and reduced benefits from SNAP (Supplemental Nutrition Assistance Program, formerly called food stamps), Chukumba said in a note. He added that the positives in the quarter included:
- Net sales growth of 3.4% to $10.8 billion.
- Same-store sales growth of 2.0%, driven by 1.4% increase in customer traffic and 0.5% rise in average transaction.
- Comps rising in all three months of the quarter, with March being the strongest due to the earlier Easter.
- Operating margins expanded by 40 basis points (bps) year-on-year to 5.9%.
- Diluted earnings grew 12.4% to $2.00 per share, beating consensus by 11 cents per share.
Management raises their full-year diluted earnings guidance to $7.20-$7.45 per share, from their earlier projection of $7.10-$7.35 per share, taking the mid-point higher than consensus of $7.23 per share, the analyst stated.
He noted, however, that CEO Todd Vasos is scheduled to leave Dollar General for the second time by year’s end and the "wheels immediately fell off" the last time he left the company.
Guggenheim Securities: Dollar General's results were "somewhat mixed versus our forecasts," Heinbockel said. The results marginally topped the recently lowered Street expectations and were driven by SG&A (selling, general, and administrative expenses), rather than by gross margin, he added.
Due to soft third-party data, comp expectations were below 2%, although markets expected healthy gross and EBITDA margins, the analyst stated. "Instead, comps hit the threshold, solid SG&A control contributed to bottom-line upside and the 1Q beat was flowed through to a raised 2026 outlook," he further wrote.
DG Price Action: Dollar General shares were down 0.14% at $104.94 at the time of publication on Thursday, according to Benzinga Pro data.
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