Dollar General $DG is starting to look like one of the best turnaround stories in retail.
A few quarters ago, the stock was in freefall after posting its worst earnings reaction in history.
The Q3 2024 report was a wake-up call. Margins were under pressure, comps were deteriorating, and execution had faltered.
But fast forward to today, and the narrative is shifting.
The company delivered a double beat this quarter and rallied nearly +16%, marking its best earnings reaction ever.
A stock left for dead just eight months ago is now stringing together three consecutive positive earnings reactions.
Under new leadership, they are starting to repair investor confidence.
They are focused on improving inventory efficiency, stabilizing margins, and reconnecting with their core low-income consumer.
The market is taking notice.
The story isn’t just about repairing a broken business.
It’s about re-earning trust from investors. So far, Dollar General is doing precisely that.
So what else did we learn from this earnings report? Let’s dive into the details.
Here are the latest earnings stats for DG 👇
*Click the image to enlarge it
Dollar General had a +4.78 reaction score after reporting a double beat.
The company reported revenues of $10.44B, versus the expected $10.29B, and earnings per share of $1.78, versus the expected $1.48.
Now let's dive into the data and talk about what happened with this report 👇
DG had its best earnings reaction ever:
Dollar General rallied 15.9% after this earnings report, and here's why:
The company delivered strong results that beat expectations on top and bottom lines. Net sales increased by 5.3% year-over-year, same-store sales increased by 2.4%, and EPS increased by 7.9%..
Digital and delivery growth outperformed expectations, with sales through the DoorDash partnership increasing more than 50% Y/Y. The DG Media Network also increased retail media volume by over 25%.
In addition to reporting a great quarter, the management team increased its forward guidance.
This company has been one of the biggest disasters in retail for years, but it's currently reversing its long-term fundamental and technical downtrends.
From 2022 to 2024, the stock had a remarkable streak of 9 consecutive quarters with negative earnings reactions.
Now, they've been rewarded for 3 consecutive earnings reports.
This change in fundamentals is also shown in the stock chart.
The price just decisively resolved a textbook bearish-to-bullish reversal pattern and is trading at the highest level in months. We think it has room to run.
If DG is above 97, the path of least resistance will likely remain higher for the foreseeable future.
Thank you for reading.
- The Beat Report Team
P.S.: Jeff Macke has studied retail for over 30 years and is still on the cutting edge. Every week, he shares exactly what he’s seeing in the sector, what he’s buying and selling, and what the market’s saying about the consumer. If you care about the economy's heartbeat, this is where you’ll feel it first. And it’s 100% free. Click here to get Macke’s Retail Report.
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