Dollar General Corp (NYSE:DG) stock rallies 12.35% (As on June 3, 11:24:36 AM UTC-4, Source: Google Finance) after the company has reported first-quarter net sales and earnings that topped Wall Street estimates, leading the budget retailer to lift its full-year financial guidance despite lingering uncertainty over the impact of sweeping U.S. tariffs. Operating profit also increased 5.5% to $576.1 million, topping projections of $489.8 million. Same-store sales increased 2.4% from the year-ago quarter, reflecting a 2.7% increase in average transaction amount and a 0.3% decrease in customer traffic. Growth was observed across each of the consumables, seasonal, home products and apparel categories. The Company reported net income of $391.9 million for the first quarter of 2025, an increase of 7.9% compared to $363.3 million in the first quarter of 2024. As of May 2, 2025, total merchandise inventories, at cost, were $6.6 billion compared to $6.9 billion as of May 3, 2024, a decrease of 7.0% on an average per-store basis.

DG in the first quarter of FY25 has reported the adjusted earnings per share of $1.78, beating the analysts’ estimates for the adjusted earnings per share of $1.48. The company had reported the adjusted revenue growth of 5.3 percent to $10.44 billion in the first quarter of FY25, beating the analysts’ estimates for revenue of $10.28 billion, according to Bloomberg consensus. Gross profit as a percentage of net sales was 31.0% in the first quarter of 2025 compared to 30.2% in the first quarter of 2024, an increase of 78 basis points. This gross profit rate increase was driven primarily by lower shrink and higher inventory markups; partially offset by increased markdowns.

Additionally, total additions to property and equipment in the first quarter of 2025 were $291 million, including approximately: $167 million for improvements, upgrades, remodels and relocations of existing stores; $76 million related to store facilities, primarily for leasehold improvements, fixtures and equipment in new stores; $36 million for distribution and transportation-related projects; and $12 million for information systems upgrades and technology-related projects. During the first quarter of 2025, the Company opened 156 new stores, remodeled 668 stores through Project Elevate and remodeled 559 stores through Project Renovate, and relocated 23 stores.

The net sales are expected to grow between 3.7% to 4.7% in its 2025 fiscal year, up from a prior expectations of around 3.4% 4.4%. Same store sales are seen increasing by around 1.5% to 2.5%, versus earlier guidance of 1.2% to 2.2%. Diluted earnings per share is anticipated to come in at $5.20 to $5.80. Dollar General had previously called for approximately $5.10 to $5.80.