Dollar Stores Thrive Amid Economic Uncertainty as Consumers Seek Cheaper Essentials
The US dollar store operators Dollar General and Dollar Tree have reported better-than-expected quarterly sales as consumers seek cheaper essentials during economic uncertainty.
Dollar General shares jumped about 8% in premarket trading after the company also raised its annual sales forecast, while Dollar Tree's shares fell by around 7% as it forecasted current-quarter profit below estimates.
The dollar stores are benefitting from lower-priced groceries and everyday pantry items, which customers are seeking to stretch their budgets amid higher gas and food prices.
Dollar General reported a 3.5% rise in quarterly same-store sales, driven by growth in categories such as seasonal, home products, and apparel. The company raised its annual same-store sales growth target to 2.5-2.9%, up from 2.2-2.7% earlier.
The dollar store operators are also investing their tariff refunds, with Dollar General expecting a profit of around $7.80-$8.00 per share, including an estimated benefit from tariff refunds of roughly 25 cents.