Dollar General (NYSE:DG) shares fell more than 5% in premarket trading on Thursday after the discount retailer issued annual comparable sales guidance that failed to meet elevated expectations on Wall Street following a sharp run-up in the stock.
Recent economic data suggest that growth in the U.S. economy has been increasingly driven by higher-income households and corporate spending, while lower-income consumers continue to face pressure from rising living costs and a sluggish hiring environment.
In what some analysts describe as a “K-shaped” economic recovery, many consumers have turned to lower-priced essentials and cut back on spending for higher-priced discretionary goods.
Against this backdrop, shares of Tennessee-based Dollar General—which sells a broad range of everyday products including national brands and private-label goods—have surged more than 93% over the past year. The stock has also gained over 5% so far this year, even as broader markets faced volatility linked to concerns over artificial intelligence disruptions and geopolitical tensions related to the conflict with Iran.
For the fourth quarter, Dollar General reported earnings per share of $1.93, compared with $0.87 in the same period a year earlier and above Bloomberg consensus estimates of $1.60. Net sales increased 5.9% year-over-year to $10.91 billion, exceeding expectations of $10.8 billion. Company executives also pointed to progress in an ongoing turnaround strategy, particularly through cost-reduction initiatives.
Despite the stronger fourth-quarter performance, analysts at Vital Knowledge said the company’s fiscal 2026 outlook was “mostly inline” with expectations. Dollar General projected full-year comparable sales growth of 2.2% to 2.7%, compared with Bloomberg consensus estimates of 2.45%.
The company also forecast annual earnings in a range of $7.10 to $7.35 per share, broadly in line with expectations of $7.11 per share.