Dollar General (DG) Stock Forecast & Price Target

Dollar General's positive outlook is supported by a slight increase in sales guidance, with same-store sales expected to rise approximately 2.4% at the midpoint, fueled by a 60% year-over-year growth in sales through its DoorDash partnership, now reaching over 17,000 stores. In the second quarter, Dollar General reported a revenue increase of 5.1% year-over-year to $10.73 billion, with same-store sales rising 2.8%, surpassing expectations and demonstrating broad-based gains across merchandise categories and customer demographics. Additionally, the company achieved a gross margin expansion of 137 basis points to 31.3%, attributed to lower shrink and higher inventory markups, indicating strong operational efficiency amidst an evolving retail landscape.

Dollar General's financial outlook appears negative primarily due to increasing pressure on its core customer base, which is exacerbated by rising gas and food prices. The company is expected to face an annual headwind of approximately $200 million in incentive compensation, translating into an estimated EPS drag of $0.69-$0.70 for 2025. Furthermore, a deceleration in comparable store sales, which dropped from 4.8% in 1Q25 to 3.3% in 2Q25, alongside competitive pressures from larger retailers like Walmart, could further impact Dollar General's sales and margins.