Dollar General posts record sales as bargain stores attract more people anxious about the economy

By MICHELLE CHAPMAN, AP Business Writer

Dollar General set a quarterly sales record of $10.44 billion and upgraded its annual profit and sales outlook as Americans tighten their budgets and spend more at bargain stores and off-price retailers amid economic uncertainty.

The U.S. economy shrank at a 0.2% annual pace from January through March, the first drop in three years, as President Donald Trump’s trade wars dented spending by businesses. Consumer spending slowed sharply.

Dollar General, based in Goodlettsville, Tennessee, stands out because it is raising its expectations for the year while most traditional retailers, like Macy’s, Target or Best Buy, are dialing back profit and or sales projections, citing anxious customers or the impact of tariffs.

For the period ended May 2, Dollar General’s sales climbed 5% to $10.44 billion from $9.91 billion. That’s better than the $10.29 billion that Wall Street was expecting, according to a poll by Zacks Investment Research.

Sales at stores open at least a year, a key indicator of a retailer’s health, increased 2.4%.

Customer traffic dipped 0.3%, but the average transaction amount rose 2.7%.

Shares jumped more than 15% Tuesday, and shares of rival Dollar Tree, which reports its quarterly performance Wednesday, rose 6%.

Dollar General earned $391.9 million, or $1.78 per share, in the quarter, blowing past the $1.47 per share that Wall Street had expected, as well as the $363.3 million profit it recorded during the same period last year.

Dollar General said that even though it topped its own expectations, there is a lot of uncertainty about how tariffs will impact its business and its customers for the remainder of the year.

People are trading down, or visiting bargain chains, as they seek to extend their spending, but lower-income Americans are much more vulnerable.