The discount retailer raised its annual sales outlook despite tariff pressure
Shares of Dollar General Corp (NYSE:DG) are surging, last seen 13.6% higher at $110.39, on track for their largest daily pop ever, after the discount retailer beat earnings and revenue expectations and lifted its full-year sales outlook. For the fiscal first quarter, Dollar General posted earnings of $1.78 per share on revenue of $10.44 billion, topping estimates of $1.48 and $10.31 billion, respectively. The company noted its guidance assumes current tariff rates will remain in effect through mid-August.
Following the report, DG's options pits are seeing tons of activity. In just the first hour of trading, over 51,000 options have changed hands -- 10 times the average intraday amount and volume in the top percentile of its annual range. Leading the charge is the weekly 6/6 120-strike call, followed closely by the 110-strike call from the same series.
Analysts have yet to weigh in, but we could see a change in tune within the next few days. Of the 28 in coverage, 17 still rate Dollar General stock a tepid "hold." Plus, the 12-month consensus price target of $95.22 is an 11% discount to current levels. This leaves room for sentiment to improve in the form of upgrades and/or price-target hikes.
The shares are attempting to fill in their mid-August bear gap that sent them back below the $100 level for the first time since December 2018. DG now stands 45.1% higher on a year-to-date basis, but remains down 21.2% over the last 12 months. Dollar General stock is also trading above its 320-day moving average for the first time since February 2023.