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DOLLAR GENERAL CORP (DG)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 2026 delivered a broad-based beat: diluted EPS of $1.86 vs Wall Street consensus of $1.57* and net sales of $10.73B vs $10.68B*, driven by 2.8% same-store sales, improved gross margin, and lower interest expense .
  • Gross margin expanded 137 bps YoY to 31.3% on lower shrink, higher markups, and lower damages; SG&A deleveraged 121 bps on incentive compensation, repairs, and benefits .
  • Management raised FY2025 guidance: net sales growth 4.3–4.8% (prior 3.7–4.7%), same-store sales 2.1–2.6% (prior 1.5–2.5%), and EPS to $5.80–$6.30 (prior $5.20–$5.80) .
  • Company flagged tariff uncertainty and near-term SG&A headwinds (incentive compensation accrual), but reiterated store project execution and capex plans; dividend maintained at $0.59 per share .

Values marked with * are from S&P Global consensus estimates.

What Went Well and What Went Wrong

  • What Went Well

    • EPS and revenue beats vs consensus; same-store sales up 2.8% with traffic +1.5% and average ticket +1.2%; growth across consumables, seasonal, home, and apparel .
    • Gross margin +137 bps YoY on lower shrink and damages and higher markups; operating profit +8.3% YoY to $595.4M, interest expense -15.3% YoY .
    • CEO: “We are pleased with our strong second-quarter results, including earnings growth that significantly exceeded our expectations…our improved execution…is resonating with both existing and new customers” .

  • What Went Wrong

    • SG&A rate up 121 bps YoY (25.8% of sales), driven by incentive compensation, repairs & maintenance, and benefits .
    • Management highlighted tariff uncertainty and potential consumer pressure if broader retail price increases take hold .
    • CFO previously cautioned Q2 EPS would be pressured vs prior year by incentive compensation accrual reversal in the prior-year quarter, implying near-term deleverage (context for quarterly cadence) .

Financial Results

MetricQ4 2025Q1 2026Q2 2026
Net Sales ($USD Billions)$10.304 $10.436 $10.728
Diluted EPS ($)$0.87 $1.78 $1.86
Gross Profit Margin (%)29.40% 30.96% 31.34%
SG&A (% of Sales)26.55% 25.44% 25.79%
Operating Margin (%)2.86% 5.52% 5.55%
Same-Store Sales Growth (%)1.2% 2.4% 2.8%
Segment Net Sales (Q2 2026)Amount ($USD Millions)YoY Change
Consumables$8,819.9 +5.0%
Seasonal$1,106.1 +4.9%
Home Products$511.8 +6.6%
Apparel$289.9 +4.2%
Total Net Sales$10,727.7 +5.1%
KPIsQ2 2026Prior Year Q2
Same-Store Sales+2.8% +0.5%
Traffic / Avg Transaction+1.5% / +1.2% n/a
Average Sales per Sq Ft (TTM)$266 $263
Inventory Turnover (TTM)4.3x 3.9x
Stores Opened (Q2)204 n/a
Results vs Estimates (Q2 2026)Consensus*Actual
Revenue ($USD Billions)$10.680*$10.728
Diluted EPS ($)$1.57*$1.86
EPS Estimate Count25*—
Revenue Estimate Count21*—

Values marked with * are from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales GrowthFY2025~3.7%–4.7% ~4.3%–4.8% Raised
Same-Store Sales GrowthFY2025~1.5%–2.5% ~2.1%–2.6% Raised
Diluted EPSFY2025~$5.20–$5.80 ~$5.80–$6.30 Raised
Effective Tax Rate (assumption)FY2025~23.5% ~23.5% Maintained
Capital ExpendituresFY2025$1.3–$1.4B $1.3–$1.4B Maintained
Share RepurchasesFY2025None None Maintained
Real Estate ProjectsFY2025~4,885 projects ~4,885 projects Maintained
DividendNext Quarterly$0.59 declared (Jun 2) $0.59 declared (Aug 27) Maintained

Earnings Call Themes & Trends

Note: Q2 2026 transcript could not be retrieved due to a document access issue; current-period narrative reflects Q2 press release and 10-Q. Q-1 and Q-2 references use Q1 2026 and Q4 2025 calls.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q2 2026)Trend
Tariffs/MacroCFO guided caution: tariff pause expiring mid-August; plans to mitigate; Q2 EPS YoY expected down on incentive comp accrual vs prior year .10-Q: tariffs did not materially impact first two quarters; uncertainty remains; potential consumer pressure if broad price increases .Cautious but contained YTD
Supply Chain & ShrinkShrink improved 68 bps in Q4; 61 bps in Q1; self-checkout removal and control environment cited .Gross margin up 137 bps YoY on lower shrink/damages and higher markups .Continued improvement
Non-Consumables & Trade-In CustomersPositive non-consumable comps in Q1; trade-in from higher-income customers increasing; deliveries expanding .All categories up in Q2; seasonal/home notable; mix still consumables-heavy but slight improvement .Improving mix
Digital/Delivery & DG Media NetworkDoorDash partnership; own same-day delivery pilot; media network +25% YoY in Q1 .Webcast scheduled; continued expansion implied; no Q2 transcript available .Scaling
Store Portfolio & pOpshelfQ4 closures (96 DG; 45 pOpshelf); pOpshelf layout changes driving double-digit lifts; remodel programs (Elevate/Renovate) .Q2: 204 openings, 1,321 remodels (729 Elevate; 592 Renovate), 15 relocations; capex maintained .Execution pace high

Management Commentary

  • CEO (Q2 press release): “earnings growth that significantly exceeded our expectations…improved execution…progress advancing key initiatives…resonating with both existing and new customers” .
  • CFO (prior quarter context): “Shrink improvement…benefit of 61 bps…expect that to continue…we now anticipate incentive compensation to be a headwind of approximately $180–$200 million” .
  • Strategy: Project Elevate (partial remodel) and Project Renovate (full remodel) to lift mature store comps 3–5% and 6–8% respectively; accelerating projects to complete by end of Q3 to maximize operating weeks .

Q&A Highlights

Note: Q2 2026 Q&A unavailable; highlights below reflect Q1 2026 call (closest available).

  • Top-line drivers: traffic expected to improve; May traffic turned positive; balanced comps across consumables/non-consumables; trade-in customers increasing .
  • Pricing posture: everyday low price targeted within 3–4 pts of mass; >2,000 SKUs at or below $1 price point; promotional environment “tame” and normalized .
  • Store returns: new stores ~17% IRR; pivot to mature store remodels to drive comp and reduce R&M .
  • Margin levers: shrink tailwind ongoing; damages starting to improve; longer-term targets include 40 bps damages improvement and 80 bps shrink recovery toward pre-pandemic .

Estimates Context

  • Q2 2026 results beat S&P Global consensus: EPS $1.86 vs $1.57*, revenue $10.73B vs $10.68B*; continuing momentum after Q1 2026 beat (EPS $1.78 vs $1.48*, revenue $10.44B vs $10.29B*) .
  • FY2025 guidance raised across sales, same-store sales, and EPS ranges; estimates likely to revise up on the stronger Q2 and updated outlook .

Values marked with * are from S&P Global.

Key Takeaways for Investors

  • EPS and revenue beats alongside raised FY2025 guidance are positive catalysts; margin expansion from structural shrink/damages improvements appears durable .
  • Near-term SG&A headwinds (incentive compensation accruals) may pressure quarterly cadence; watch Q3 execution as remodels complete and operating weeks expand .
  • Tariff risk is present but contained YTD; DG’s mitigation playbook (sourcing diversification, vendor cost concessions, product re-engineering) should limit gross margin impact if rates revert .
  • Mature store initiatives (Elevate/Renovate) and digital (DoorDash, same-day delivery, DG Media Network) are building multi-year comp and margin levers; track non-consumable mix and media monetization .
  • Balance sheet improving (interest expense down, early debt redemption); capex steady at $1.3–$1.4B supporting 4,885 projects; dividend maintained, buybacks paused to preserve leverage targets .

Source Documents and Additional Context

  • Q2 2026 8-K and press release (results, guidance, dividend): .
  • Q2 2026 10-Q (financial statements, MD&A, KPIs, segment detail): .
  • Q1 2026 8-K and press release/guidance (prior baseline): .
  • Q4 2025 8-K and press release (store portfolio actions, long-term framework): .
  • Q2 2026 webcast announcement: .
  • Earnings call transcripts used for trend context (Q1 2026, Q4 2025): .

Note: The Q2 2026 earnings call transcript (Document ID 2) could not be retrieved due to a database inconsistency. We reviewed Q2 2026 8-K and 10-Q in full and used Q1 2026 and Q4 2025 calls for thematic continuity.