GOODLETTSVILLE, Tenn. — Dollar General reported strong gains in sales, profit and earnings for the fourth quarter and fiscal year ended Jan. 30, 2026, as the retailer benefited from higher customer traffic, improved margins and continued momentum in its value-focused strategy.
The company said fourth-quarter net sales rose 5.9% to $10.9 billion, compared with $10.3 billion in the same period a year earlier. Same-store sales increased 4.3%, driven by a 2.6% increase in customer traffic and a 1.7% rise in average transaction size.
Chief executive officer Todd Vasos credited the results to the company’s ongoing strategic initiatives and the continued relevance of its value and convenience model, particularly in rural communities.
“We are pleased with our strong fourth quarter and fiscal year results, and I want to thank our employees for their unwavering commitment to Serving Others,” Vasos said. “Our fourth quarter performance was highlighted by a 4.3% increase in same-store sales and continued advancement of our key initiatives, which contributed to strong operating margin expansion and EPS growth that well exceeded our expectations.”
Profit and margins rebound
Operating profit in the fourth quarter more than doubled to $606.3 million, up 106.1% from $294.2 million a year earlier. The prior-year quarter had been significantly affected by charges related to a store portfolio optimization review, including store closures and impairment charges tied to the retailer’s pOpshelf concept.
Net income for the quarter rose to $426.3 million, a 122.9% increase from $191.2 million a year earlier. Diluted earnings per share climbed to $1.93, up from $0.87 in the fourth quarter of fiscal 2024.
Gross margin improved as well. Gross profit represented 30.4% of net sales in the quarter, compared with 29.4% a year earlier. The increase was driven by lower shrink, higher inventory markups and reduced inventory damages, partially offset by a higher LIFO provision.
Selling, general and administrative expenses also declined as a percentage of sales, falling to 24.9% from 26.5% a year earlier. The improvement reflected lower impairment charges and reduced retail salary expenses relative to sales, partially offset by higher incentive compensation.
Interest expense also declined, dropping 20.6% year over year to $52.3 million.
Full-year results show steady growth
For the full fiscal year, Dollar General reported net sales of $42.7 billion, up 5.2% from $40.6 billion in fiscal 2024.
Same-store sales increased 3.0% for the year, reflecting a 1.6% rise in traffic and a 1.4% increase in average transaction size. Growth occurred across all major merchandise categories, including consumables, seasonal items, home products and apparel.
Operating profit for fiscal 2025 rose 28.6% to $2.2 billion from $1.7 billion in fiscal 2024. Net income increased 34.4% to $1.5 billion, while diluted earnings per share climbed 34.1% to $6.85.
Annual operating cash flow reached $3.6 billion, up 21.3% from the prior year.
The company’s gross profit margin for the year expanded to 30.7% of net sales, compared with 29.6% in fiscal 2024. The improvement again reflected lower shrink and inventory damage, as well as higher markups.
Investments in stores and infrastructure
Dollar General continued to invest heavily in its store base and supply chain infrastructure during fiscal 2025, spending approximately $1.2 billion on capital projects.
The majority of those investments were directed toward store upgrades and expansion. The retailer allocated about $732 million to improve, remodel or relocate existing locations.
Distribution and transportation projects accounted for $215 million, while roughly $203 million was invested in new stores.
During the year, Dollar General opened 581 new stores in the United States and eight new locations in Mexico. The company also remodeled 2,000 stores through its Project Renovate program and upgraded another 2,254 locations through Project Elevate.
In addition, the retailer relocated 47 stores as part of efforts to optimize its store portfolio.
Inventory and shareholder returns
Merchandise inventories totaled $6.3 billion at the end of fiscal 2025, down from $6.7 billion a year earlier. On a per-store basis, inventory declined 7%, reflecting improved inventory management.
The company did not repurchase any shares during fiscal 2025 under its share repurchase program.
Dollar General’s board of directors declared a quarterly cash dividend of $0.59 per share, payable on or before April 21, 2026, to shareholders of record as of April 7.
Outlook for fiscal 2026
Looking ahead, Dollar General expects continued growth in fiscal 2026, though at a more moderate pace.
The company projects net sales growth of approximately 3.7% to 4.2% and same-store sales growth between 2.2% and 2.7%.
Diluted earnings per share are expected to range from $7.10 to $7.35, assuming an effective tax rate of roughly 25%. The guidance also factors in a projected $0.13 per-share impact from the expiration of the Work Opportunity Tax Credit at the end of 2025.
Capital expenditures are expected to rise to between $1.4 billion and $1.5 billion as the company continues investing in store development and strategic initiatives.
Dollar General plans to execute about 4,730 real estate projects in fiscal 2026, including opening approximately 450 new stores in the United States and about 10 in Mexico. The company also intends to remodel roughly 2,000 stores through Project Renovate and 2,250 stores through Project Elevate, while relocating about 20 locations.
Vasos said the retailer is focused on strengthening its value proposition while continuing to expand its footprint.
“Looking ahead to 2026, we are excited about our plans to drive continued growth through a variety of initiatives designed to further enhance the customer experience, elevate our brand, drive greater enterprise-wide efficiencies and extend our reach, all while creating long-term shareholder value,” he said.
