Dollar General beats Q4 EPS by 16% on 4.3% comp growth, sets FY26 sales target of 3.7-4.2%

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What changed

Q4 came in well ahead of consensus, with EPS of $1.93 versus $1.66 expected (+16%) and revenue of $10.91B versus $10.81B expected (+0.9%). Net sales rose 5.9% and same-store sales grew 4.3%, while gross margin expanded 105 bps on shrink reduction and higher inventory markups and operating profit more than doubled. Versus the prior quarter's raised outlook, FY2026 guidance was maintained rather than raised. Market reaction was negative despite the beat, with the stock falling about 4.6% on the session and drifting ~14.9% lower afterward, suggesting investors focused on the decelerating top-line guide rather than the EPS surplus.

Guidance delta

Dollar General maintained its FY2026 guidance rather than raising it: net sales growth of 3.7-4.2%, EPS of $7.10-$7.35 and capex of $1.4-$1.5 billion. Management affirmed confidence in its 6-7% operating-margin target. This is a 'maintained' posture versus the prior quarter's 'raised' guidance sentiment, and it implies a deceleration from the 5.9% sales growth reported in Q4.

Key takeaways

• Q4 net sales rose 5.9% to $10.91B and same-store sales grew 4.3%; EPS of $1.93 beat the $1.66 estimate by 16%
• Gross margin expanded 105 bps, driven by shrink reduction and higher inventory markups; operating profit more than doubled
• Non-consumable sales and $1 value offerings outperformed, with $1 seasonal items recording the highest Q4 sell-through
• Delivery contributed roughly 80 bps to Q4 comp sales; DG Media Network generated about $170M revenue and is highly accretive to gross margin
• FY2026 guidance: sales growth 3.7-4.2%, EPS $7.10-$7.35, capex $1.4-$1.5B; capital allocation prioritizes $1.7B note redemptions and the $0.59 dividend, with no share repurchases in 2026

Management priorities

• Roll out a new, more open store format and continue remodels (Project Renovate and Project Elevate)
• Launch at least 15 new non-consumable private brands in 2026
• Scale delivery options via myDG, DoorDash and Uber Eats, and grow the DG Media Network
• Deploy an AI operating system for store and supply-chain efficiencies
• Pilot a loyalty/subscription program and expand shoppable social initiatives