Dollar stores see mixed outlook ahead of earnings next week, Gordon Haskett comments

Dollar General reported Q2 net income rose 33.8% to $550.3M, with sales up 5.2% to $11.3B, driven by tariff refunds and delivery growth. The company raised its full-year outlook, now expecting sales growth of 4% to 4.3% and EPS of $7.80 to $8.00. It also expanded its $1 Value Valley sections to 9,000 stores, boosting comp-store sales.

Dollar General raised its fiscal 2026 EPS outlook to $7.80-$8.00, above the $7.54 analyst consensus, citing supply-chain efficiencies and lower inventory loss. UBS maintained a buy rating and $168 price target, highlighting the company's improving core earnings. The stock is currently trading at $122.

Dollar Tree (DLTR) and Dollar General (DG) both reported comparable store sales growth above expectations, 3.7% and 3.5% respectively. Despite Dollar Tree's stronger performance, its stock fell 3.92% while Dollar General's rose 2.53%. Analyst Jim Cramer attributed this to differing investor expectations, noting Dollar Tree's past acquisition of Family Dollar continues to impact its valuation.

Rhonda Taylor, legal chief at Dollar General, will retire in December after 26 years. Her successor, Kelly Collier, will lead the legal team amid challenges from the company's rapid expansion. Jeffrey Bleich, a former U.S. ambassador, is returning to law and diplomacy.

UBS reported that Dollar Tree's Q2 results were better than headlines suggested. The firm raised its price target to $150 from $145 and maintained a Buy rating. The company's stock has seen a 5-day change of +1.22% and a year-to-date change of -2.59%.

Dollar General (DG) reported Q2 fiscal 2026 earnings of $2.23 per share, beating estimates. Net sales rose 5.2% YoY to $11.29B. Same-store sales increased 3.5%. Gross margin expanded 127 bps to 32.6%. The company raised its fiscal 2026 guidance for net sales and EPS.