Dollar General Corporation (NYSE: DG) today announced its financial results for the second quarter of fiscal year 2025, a 13-week period that ended on August 1, 2025. The discount retailer, which operates more than 20,000 stores across the United States, reported broad-based growth in sales, profitability, and earnings per share, reflecting stronger customer engagement, disciplined cost management, and continued execution of its long-term strategic initiatives.
The second-quarter results demonstrated the company’s ability to adapt to consumer needs in a challenging retail environment while maintaining its mission of providing value and convenience.
Headline Financial Results
- Net Sales: Increased 5.1% year-over-year to $10.7 billion
- Same-Store Sales: Grew 2.8%, driven by both increased traffic and higher average ticket size
- Operating Profit: Rose 8.3% to $595.4 million
- Diluted Earnings Per Share (EPS): Increased 9.4% to $1.86
- Net Income: Up 10% to $411.4 million
- Operating Cash Flow (Year-to-Date): Grew 9.8% to $1.8 billion
- Quarterly Dividend: Declared at $0.59 per share
Commenting on the results, Todd Vasos, Dollar General’s Chief Executive Officer, said:
“We are pleased with our strong second-quarter results, including earnings growth that significantly exceeded our expectations. Our improved execution, along with progress advancing key initiatives, is resonating with both existing and new customers. These results underscore the strength of our value proposition and our commitment to convenience. I want to thank our team for their dedication to fulfilling our mission of Serving Others every day across more than 20,000 stores.”
Vasos further emphasized that Dollar General remains well-positioned to capitalize on growth opportunities:
“Looking ahead, we believe we have ample opportunity to drive growth and further improve our operating and financial performance as we continue to execute against our long-term financial framework. We are confident in the resiliency of our business model and excited about our ability to deliver sustainable long-term value to customers, associates, and shareholders alike.”
Detailed Financial Performance
Net Sales Growth:
Dollar General’s net sales rose to $10.7 billion in Q2 FY2025, up from $10.2 billion in the same quarter of FY2024. Growth was primarily driven by new store openings and strong performance in existing stores, partially offset by the impact of planned store closures.
Same-Store Sales:
Comparable store sales grew 2.8%, with gains across all key product categories—consumables, seasonal items, home products, and apparel. The increase was supported by a 1.5% rise in customer traffic and a 1.2% increase in average transaction value, demonstrating that consumers continue to seek affordable everyday essentials and discretionary goods at Dollar General locations.
Gross Profit:
Gross profit as a percentage of sales increased 137 basis points to 31.3%. The improvement was driven primarily by lower shrink, higher inventory markups, and reduced damages. These positives were partially offset by higher LIFO provisions, increased markdown activity, and rising distribution costs.
SG&A Expenses:
Selling, general, and administrative expenses represented 25.8% of net sales, up from 24.6% in the prior-year quarter. The higher expense ratio was attributed mainly to increased incentive compensation, higher maintenance costs, and employee benefit-related expenses.
Operating Profit:
Operating income increased 8.3% year-over-year to $595.4 million, reflecting both higher sales and improved gross margins despite higher SG&A expenses.
Interest and Taxes:
Interest expense fell 15.3% to $57.7 million, compared to $68.1 million in Q2 FY2024, as the company benefited from lower average borrowing costs. The effective income tax rate for the quarter was 23.5%, slightly higher than the 22.3% reported in the prior year.
Net Income and EPS:
Dollar General delivered net income of $411.4 million, up from $374.2 million a year earlier. Diluted EPS rose to $1.86, reflecting a 9.4% increase compared to $1.70 per share in Q2 FY2024.
Merchandise Inventories
As of August 1, 2025, merchandise inventories stood at $6.6 billion, down from $7.0 billion a year earlier. On an average per-store basis, inventories declined 7.4%, reflecting better inventory management and supply chain efficiencies.
Capital Investments and Store Growth
Dollar General continues to invest in its infrastructure and expansion strategy. For the 26-week period ending August 1, 2025, capital expenditures totaled $694 million. These investments included:
- $365 million for upgrades, remodels, and relocations of existing stores
- $151 million for distribution and transportation-related projects
- $143 million for leasehold improvements, fixtures, and equipment in new stores
- $32 million for information systems and technology enhancements
During Q2 FY2025 alone, Dollar General:
- Opened 204 new stores
- Remodeled 729 stores through Project Elevate
- Renovated 592 stores under Project Renovate
- Relocated 15 stores
These projects underscore the company’s commitment to modernizing its store base while expanding its footprint to serve new communities.
Dividend Declaration
On August 27, 2025, the Board of Directors declared a quarterly cash dividend of $0.59 per share, payable on or before October 21, 2025, to shareholders of record as of October 7, 2025. The company reaffirmed its commitment to returning value to shareholders while continuing to invest in growth initiatives. However, the Board noted that future dividends will remain subject to operational results, financial conditions, debt capacity, and other considerations.
Outlook and Strategic Priorities
Looking ahead, Dollar General’s management expressed confidence in the company’s ability to sustain growth despite a complex retail and economic environment. Key priorities include:
- Expanding its store base while upgrading existing locations to enhance customer experience.
- Continuing to invest in technology and supply chain efficiency to improve operations.
- Strengthening its value proposition by offering competitively priced merchandise across all categories.
- Maintaining disciplined financial management to support dividends, capital expenditures, and long-term growth.
As CEO Todd Vasos highlighted, Dollar General’s business model—focused on affordability, convenience, and community presence—positions the company well for resilience in both favorable and challenging economic cycles.
