Outlook
Raises Financial Guidance for Fiscal Year 2026Guidance raised
Results
GOODLETTSVILLE, Tenn.--( BUSINESS WIRE )-- Dollar General Corporation (NYSE: DG) today reported financial results for its second quarter (13 weeks) ended July 31, 2026.
Second Quarter Fiscal Year 2026 HighlightsGuidance raised
Net Sales Increased 5.2% to $11.3 Billion
1Same-Store Sales Increased 3.5%
Operating Profit Increased 29.2% to $769.2 Million
Diluted Earnings Per Share (“EPS”) Increased 33.3% to $2.48
Year-to-Date Cash Flow From Operations of $1.5 Billion
Capital return
Board of Directors Declares Quarterly Cash Dividend of $0.59 per share
Management commentary
“We are pleased with our second quarter performance, which included balanced topline growth, healthy operating margin expansion and strong double-digit EPS growth,” said Todd Vasos, Dollar General’s chief executive officer.
“These results, which exceeded our expectations even before considering the benefit from tariff refunds after related reinvestments, are a testament to the strong execution, strategic direction, and continued dedication of our team.
I want to thank our associates in our stores, distribution centers, private fleet and store support center for the work they do every day to fulfill our mission of Serving Others .”
5“Our results reflect continued momentum across the business, including our fifth consecutive quarter of customer traffic growth and the sixth consecutive quarter of positive comparable sales growth across all four merchandising categories.
This broad-based performance reflects the strength of our unique combination of value and convenience and the important role Dollar General plays in the communities we serve.
As we move through the back half of the year, we remain confident in our strategy, our long-term financial framework and our ability to continue driving value for our customers, associates and shareholders.”
Results
Second Quarter Fiscal Year 2026 Overview
Net sales increased 5.2% to $11.3 billion in the second quarter of fiscal 2026 compared to $10.7 billion in the second quarter of fiscal 2025.
The net sales increase was driven by growth in same-store sales and positive sales contributions from new stores, partially offset by the impact of store closures.
8Same-store sales increased 3.5% compared to the second quarter of fiscal 2025, reflecting increases of 2.0% in customer traffic and 1.5% in average transaction amount.
Same-store sales in the second quarter of fiscal 2026 included growth in each of the consumables, seasonal, home products, and apparel categories.
Gross profit as a percentage of net sales was 32.6% in the second quarter of fiscal 2026 compared to 31.3% in the second quarter of fiscal 2025, an increase of 127 basis points.
This gross profit rate increase was primarily attributable to tariff refunds, a lower LIFO provision, and lower distribution costs; partially offset by increased markdowns and increased transportation costs.
The Company estimates the gross margin benefit of tariff refunds, after related reinvestments, was approximately 81 basis points.
Selling, General and Administrative Expenses (“SG&A”) as a percentage of net sales were essentially flat year over year, at 25.8% in both the second quarter of fiscal 2026 and the second quarter of fiscal 2025.
The primary expense that was higher as a percentage of net sales in the second quarter of 2026 was depreciation and amortization; offset by rent, which was lower as a percentage of sales.
7Operating profit for the second quarter of fiscal 2026 increased 29.2% to $769.2 million compared to $595.4 million in the second quarter of fiscal 2025.
The Company estimates the operating margin benefit of tariff refunds, after related reinvestments, was approximately 66 basis points.
Net interest expense for the second quarter of fiscal 2026 decreased 25.7% to $42.9 million compared to $57.7 million in the second quarter of fiscal 2025.
The effective income tax rate in the second quarter of fiscal 2026 was 24.2% compared to 23.5% in the second quarter of fiscal 2025.
This higher effective income tax rate was primarily due to expired federal tax credits, partially offset by a reduced state effective tax rate.
The Company reported net income of $550.3 million for the second quarter of fiscal 2026, an increase of 33.8% compared to $411.4 million in the second quarter of fiscal 2025.
4Diluted EPS increased 33.3% to $2.48 for the second quarter of fiscal 2026 compared to diluted EPS of $1.86 in the second quarter of fiscal 2025, including an estimated benefit from tariff refunds, after related reinvestments, of approximately $0.25.
Merchandise Inventories
As of July 31, 2026, total merchandise inventories, at cost, were $6.6 billion compared to $6.6 billion as of August 1, 2025, a decrease of 2.7% on an average per-store basis.
Capital Expenditures
Total additions to property and equipment in the 26-week period ended July 31, 2026 were $758 million, including approximately: $414 million for improvements, upgrades, remodels and relocations of existing stores; $168 million for distribution and transportation-related projects; $133 million related to store facilities, primarily for leasehold improvements, fixtures and equipment in new stores; and $31 million for information systems upgrades and technology-related projects.
During the second quarter of 2026, the Company opened 125 new stores in the United States and one new store in Mexico, remodeled 665 stores through Project Renovate and 711 stores through Project Elevate, and relocated 5 stores.
Capital return
Share Repurchases
The Company intends to repurchase shares under its existing share repurchase program in the second half of the fiscal year ending January 29, 2027 (“fiscal 2026”).
The Company’s total remaining authorization for future repurchases was $1.4 billion at the end of the second quarter of 2026.
Under the authorization, repurchases may be made from time to time in open market transactions, including pursuant to trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, or in privately negotiated transactions.
The timing, manner and number of shares repurchased will depend on a variety of factors, including price, market conditions, compliance with the covenants and restrictions under the Company’s debt agreements and other factors.
The authorization has no expiration date.
Dividend
On August 26, 2026, the Company’s Board of Directors declared a quarterly cash dividend of $0.59 per share on the Company’s common stock, payable on or before October 20, 2026 to shareholders of record on October 6, 2026.
While the Board of Directors currently intends to continue regular cash dividends, the declaration and amount of future dividends are subject to the sole discretion of the Board and will depend upon, among other things, the Company’s results of operations, cash requirements, financial condition, contractual restrictions, excess debt capacity, and other factors the Board may deem relevant in its sole discretion.
Outlook
Fiscal Year 2026 Financial Guidance and Store Growth Outlook
The Company is raising its financial guidance to reflect its strong first half results and its improved outlook for the remainder of the year.Guidance raised
The Company does not anticipate a material impact to its financial results from tariff refunds, after related reinvestments, in the second half of fiscal 2026.
The Company now expects the following for fiscal 2026:
6Net sales growth in the range of approximately 4.0% to 4.3%, compared to its previous expectation in the range of 3.7% to 4.2%Guidance raised
3Same-store sales growth in the range of approximately 2.5% to 2.9%, compared to its previous expectation in the range of 2.2% to 2.7%Guidance raised
2Diluted EPS in the range of approximately $7.80 to $8.00, compared to its previous expectation in the range of $7.20 to $7.45Guidance raised
Diluted EPS guidance includes the estimated benefit from tariff refunds, after related reinvestments, of approximately $0.25 in the second quarter of fiscal 2026
Diluted EPS guidance assumes an effective tax rate of approximately 24.5%
Capital return
Share repurchases of up to $700 million
Outlook
The Company continues to expect capital expenditures, including those related to investments in the Company’s strategic initiatives, in the range of $1.4 billion to $1.5 billion.Guidance reaffirmed
The Company is also reiterating its plans to execute approximately 4,730 real estate projects in fiscal 2026, including opening approximately 450 new stores in the United States and approximately 10 new stores in Mexico, remodeling approximately 2,000 stores through Project Renovate, remodeling approximately 2,250 stores through Project Elevate, and relocating approximately 20 stores.Guidance reaffirmed
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