Dollar General’s Q4 Earnings Show Mixed Results Amid Growth Concerns

NASHVILLE, Tenn., March 13, 2025 – Discount retailer Dollar General (NYSE: DG) reported a year-on-year revenue increase of 4.5% in the fourth quarter of 2024, reaching $10.3 billion. However, its GAAP profit of $0.87 per share fell 42% short of analysts’ consensus expectations.

As a value-oriented retailer, Dollar General provides a wide range of household essentials, groceries, apparel and beauty products, as well as seasonal merchandise. The company targets budget-conscious consumers, particularly in rural or lower-income areas where traditional grocery stores may not be accessible.

“Certain communities lack nearby grocery options, necessitating an alternative,” said a company spokesperson. “We strive to meet the demands of those families who prefer shopping smaller quantities and need products quickly.”

Despite the growing competition from online retailers, grocery remains one of the least penetrated sectors of e-commerce. Purchasing food often requires immediate access, making some consumers less likely to shop online. With a total revenue of $40.61 billion over the past 12 months, Dollar General has established itself as a prominent player in the consumer retail industry.

However, its expansive scale presents challenges, as there are limited locations available for new store openings, which could hinder growth. Analysts suggest that to accelerate sales, Dollar General may need to improve its pricing strategies or consider international expansion.

While Dollar General experienced a 7.9% annualized revenue growth over the past five years, its recent quarterly results showed a modest 4.5% increase, meeting market expectations. Revenue projections for the next 12 months suggest a deceleration to around 3.9%, raising concerns about the company’s growth trajectory.

“The demand for our products remains solid, which reflects positively on our market forecasting,” said the spokesperson. “We are still witnessing satisfactory growth considering our scale.”

As of the latest quarter, Dollar General operated 20,594 stores, having opened new locations at a rate of 4.4% annually over the past two years, significantly outpacing the broader consumer retail sector. This expansion indicates strong demand in underserved areas.

However, store expansion should be carefully evaluated against the performance of existing locations. Dollar General’s same-store sales, a key indicator of organic growth, were flat over the last two years, with a slight increase of 1.2% year-on-year in the latest quarter.

“We are focused on enhancing foot traffic and increasing efficiency at our current stores before further expansion,” the spokesperson added.

Despite missing earnings per share expectations due to impairment charges totaling $214 million related to store portfolio optimization, Dollar General’s improvement in same-store sales exceeded analyst forecasts for the quarter. The company maintained its guidance for full-year same-store sales.

The stock rose 5% to $78.53 following the earnings report, reflecting investor optimism. Potential investors should weigh these mixed results against Dollar General’s overall business health, growth potential, and current valuation metrics before making investment decisions.