US' Dollar General FY25 Q3 sales up 4.6%; outlook raised

American chain of discount stores Dollar General has delivered a stronger-than-expected performance for the quarter ended October 31, 2025, reporting higher sales, improved margins, and a sharp rebound in profitability.

Net sales rose 4.6 per cent to $10.6 billion, driven by new store contributions and a 2.5 per cent increase in same-store sales. Gross margin expanded by 107 basis points to 29.9 per cent, supported by higher inventory markups and lower shrink, partly offset by a larger Last-In, First-Out (LIFO) provision.

Operating profit climbed 31.5 per cent to $425.9 million, while net income rose 43.8 per cent to $282.7 million. Diluted EPS increased at the same pace to $1.28. Year-to-date operating cash flow improved 28.4 per cent to $2.8 billion. Inventories fell 8.2 per cent on an average per-store basis, easing to $6.7 billion.

“I want to thank our team for their work serving our customers and communities, which led to another quarter of strong financial results. These results were highlighted by EPS growth of 44 per cent, strong operating margin performance, and balanced sales growth, including market share gains across both consumable and non-consumable categories,” said Todd Vasos, Dollar General’s chief executive officer.

Reflecting stronger performance in the quarter and a more confident outlook, Dollar General raised its fiscal 2025 (FY25) guidance. It now expects net sales growth of 4.7–4.9 per cent, same-store sales growth of 2.5–2.7 per cent, and diluted EPS of $6.3–$6.5. Capital expenditure is projected towards the lower end of the $1.3–1.4 billion range, with no share repurchases assumed.

The retailer plans roughly 4,885 real estate projects in FY25, including approximately 575 new stores in the US, up to 15 new stores in Mexico, around 2,000 Project Renovate remodels, about 2,250 Project Elevate remodels, and approximately 45 relocations, the company said in a release.

For the year ending January 29, 2027, FY26, the company intends to execute around 4,730 real estate projects, including approximately 450 new stores in the US, around 10 new stores in Mexico, about 2,000 Project Renovate remodels, around 2,250 Project Elevate remodels, and approximately 20 relocations.

“We are especially pleased with the continued progress we are making against our key initiatives and are excited about the opportunities ahead of us at Dollar General, including the 2026 real estate growth plans we announced today. Looking ahead, we are confident in our long-term financial framework and our ability to create sustainable long-term value for our customers, associates, and shareholders,” Vasos added.

ALCHEMPro News Desk (HU)