Key Points
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DG’s same-store sales accelerated to 4.3% in the fourth quarter.
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Dollar General’s turnaround strategy is paying off.
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2026 guidance called for its growth to slow.
Shares of Dollar General (NYSE: DG) were pulling back today after the discount retailer topped estimates in its fourth-quarter earnings report, but came up short with its guidance for fiscal 2026.
After the stock soared over the last year, the pullback could signal that its momentum is fading.
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As a result, the stock was down 6.4% as of 9:53 a.m. ET.
An aisle in a discount store.
Image source: Getty Images .
Dollar General misses the mark
Dollar General stock has surged over the last year as a turnaround effort and a tailwind from some consumers trading down to lower-priced merchandise has benefited the company, and that momentum continued into the fourth quarter.
Same-store sales rose 4.3%, accelerating from earlier in the year, and revenue was up 5.9% to $10.9 billion, edging out the consensus at $10.82 billion.
CEO Todd Vasos said, “Overall, this momentum reflects the progress we’ve made with our strategy and the continued relevance of our unique combination of value and convenience.
Is Dollar General’s growth slowing?
Despite the strong results, investors seemed spooked by the guidance for 2026. Management called for same-store sales growth of 2.2%-2.7% and revenue growth of 3.7%-4.2%, or $44.1 billion at the midpoint, which was short of the consensus at $44.43 billion.
On the bottom line, it expects earnings per share of $7.10-$7.35, which is up 5.5% at the midpoint, and in line with the consensus at $7.25.
After the surge on the bottom line in 2025, that guidance may be a bit disappointing, but it’s very early in the year, and the forecast may be conservative.
Dollar General now trades at a price-to-earnings ratio of 20, which seems like a fair price to pay for the discount retail leader, especially after a strong performance in 2025.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
