(Reuters) -Dollar General on Tuesday raised its annual sales forecast after its quarterly results topped estimates, as still-high inflation and tariffs-led economic uncertainty drove consumers to its stores for affordable everyday essentials.
The company’s shares jumped 8% in premarket trading. They have risen about 28% so far this year.
Dollar stores have historically stood a better chance to weather out tougher economic conditions as consumers shop for cheaper goods at these outlets to stretch their budgets.
Some portion of Dollar General’s private brand products are exposed to President Donald Trump’s sweeping tariff policies currently in place on countries including China, but it expects to mitigate most of the impact to its cost of goods from these levies, the company said.
Dollar General has focused on a leaner store count and remodeling existing stores to help improve operations and cut costs at a time when its core lower-income consumer is under pressure from still-high inflation.
Dollar General now expects annual same-store sales growth between 1.5% and 2.5%, compared with its prior target of 1.2% to 2.2%.
The company’s same-store sales for the three months ended May 2 grew 2.4%, topping estimates of a 1.41% rise, according to data compiled by LSEG.
Its first-quarter earnings per share of $1.78 also handily beat estimates of $1.48.
Despite the results, Dollar General acknowledged tariff-fueled uncertainty that looms over the rest of the year, which has forced several companies to sound caution on consumer spending trends, and lower their financial targets as they brace for a hit to their profits from higher input costs.
In stark contrast, Dollar General also raised the low end of its annual earnings per share target by 10 cents to $5.20, keeping the top end unchanged at $5.80.
Rival Dollar Tree, which offloaded the Family Dollar chain earlier this year, reports first-quarter results on Wednesday.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Maju Samuel)
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