The discount retailer reports a surprise earnings beat in the first quarter
of ConsumerAffairsJune 4, 2025
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Dollar General reported over $10 billion in Q1 revenue, beating expectations and raising its full-year outlook despite inflation and tariff concerns.
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The retailer saw a significant increase in visits and spending from middle- and higher-income consumers looking for value.
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While low-income shoppers remain financially strained, the companys growth is driven by affluent shoppers trading down, potentially at the expense of other retailers.
For more than a year, dollar stores have struggled as inflation hit their core customers hardest and sales declined. More recently, tariffs have raised concerns that their prices would go even higher.
So, it was something of a surprise when Dollar General reported record revenue of more than $10 billion in the first quarter and raised its guidance for the rest of 2025.
“We believe our efforts are resonating with a wide range of customers as they continue to seek value in our more than 20,000 store locations around the country,” CEO Todd Vasos said during the company’s earnings call.
But that doesnt mean that low-income families are suddenly better able to cope with higher prices. It could mean something else.
Expanding customer base
The reason for Dollar Generals profitable quarter has more to do with its expanding customer base. More affluent shoppers frequented its stores in the first three months of the year in an effort to stretch their dollars.
“While our core customer remains financially constrained, we have seen increased trade in activity from both middle- and higher-income customers,” Vasos told analysts on the call.
“Our data shows that new customers this year are making more trips and spending more with us compared to new customers from last year while also allocating more of their spend to discretionary categories.”
Dollar Generals gain could be other retailers loss, however.
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