Dollar General Corp. got off to a strong start in fiscal year 2025 and is raising its guidance for the full year as it plans to mitigate any potential tariff impact.
On the earnings call, CEO Todd Vasos said that while Dollar General has relatively low exposure, it is “working diligently” to mitigate the impact of current tariffs on its business as much as possible using many of the same tactics that it used successfully in 2018 and 2019. These actions include working with the company’s vendor partners to reduce cost on a variety of ways, such as negotiating cost concessions, shifting manufacturing to other countries where possible, reengineering products, or finding substitute products.
“While the tariff landscape remains dynamic and uncertain, we expect tariffs to result in some price increases as a last resort, though we intend to work to minimize them as much as possible,” Vasos told analysts.
During the first quarter of 2025, the company opened 156 new stores, remodeled 668 stores through Project Elevate (an incremental remodel initiative aimed at mature stores that are not yet old enough to be part of the full remodel pipeline), remodeled 559 stores through its Project Renovate full remodel program and relocated 23 stores.
“Notably, the cost to build new stores has risen more than 40% since 2019, and these formats average approximately $500,000 to open, including both cap ex and inventory,” Vasos said on the earnings call. “Despite this increase, we continue to target healthy returns of approximately 17% on average for our portfolio.”
The discount retailer’s net income grew 8% $391.93 million, or $1.78 per share, for the quarter ended May 2, compared with $363.32 million, or $1.65 per share, in the year-ago quarter. Analysts had projected earnings per share of $1.47.
