Company Overview
Dollar General reports third quarter fiscal 2025 earnings this morning before the bell, and Wall Street is positioning for what Guggenheim calls “solid, potentially above-consensus” results. The discount retailer has been executing an impressive turnaround, with shares up 38% over the past year as management tackles the operational challenges that plagued the company in 2023 and early 2024.
The momentum is building at exactly the right time. Just days ago on November 28th, Guggenheim reaffirmed its Buy rating and $125 price target ahead of today’s report. The Q2 results showed dramatic improvement with shrink (retail theft and loss) reduced by 108 basis points, driving gross margin expansion of 137 basis points to 31.3%. Management raised full-year 2025 guidance to net sales growth of 4.3%-4.8% and same-store sales growth of 2.1%-2.6%, with EPS expected between $5.80-$6.30. For today’s Q3 report, consensus estimates call for $0.93 EPS on $10.6 billion revenue, representing modest year-over-year growth.
Key Technical and Fundamental Drivers
Earnings Today → Beat Expected Dollar General reports Q3 results this morning with consensus at $0.93 EPS and $10.6B revenue, with analysts expecting the company to exceed estimates and potentially tighten full-year guidance higher.
Fresh Analyst Reaffirmation → $125 Target Guggenheim reaffirmed their Buy rating and $125 price target on November 28th (just last week), representing 13% upside from current levels and citing confidence in continued turnaround momentum.
Shrink Reduction Success → Margin Expansion Q2 showed shrink reduced by 108 basis points, the key driver behind gross margin improvement of 137 basis points, demonstrating management’s operational execution is delivering real results.
Holiday Campaign Momentum → 24 Days of Savings DG launched an aggressive “24 Days of Savings” promotion running December 1-24 across all 20,000+ stores, positioning to capture budget-conscious holiday shoppers during peak retail season.
Strong YTD Performance → 38% Gain Shares are up 38.23% over the past 52 weeks, significantly outperforming the broader market as the turnaround thesis plays out and operational improvements drive investor confidence.
Market Takeaway
Dollar General’s earnings this morning represent a critical inflection point for the turnaround story. After struggling with theft, inventory management, and margin pressure through 2023 and early 2024, the company has demonstrably improved operations with shrink reduction leading to margin expansion. The Q2 beat and raised guidance showed the turnaround is real, not just hopeful management commentary.
What makes today’s report particularly compelling is the setup: analysts have been steadily raising estimates over the past 30 days (consensus EPS up 1.1%), suggesting growing confidence that Q3 trends are continuing the positive trajectory. The holiday “24 Days of Savings” campaign launched December 1st provides a timely narrative around traffic generation during the crucial holiday season. With Guggenheim expecting above-consensus results and the stock trading around $110, a strong beat with tightened guidance could propel shares toward that $125 analyst target. The key items to watch in the report and conference call at 9:00 AM ET will be: updated shrink trends, same-store sales composition (traffic vs. basket size), gross margin performance, and most importantly, any commentary on early holiday season results and 2026 outlook. For a discount retailer serving budget-conscious consumers, DG’s value proposition remains highly relevant in the current economic environment.