Dollar General and Dollar Tree surpassed quarterly sales estimates on Thursday as lower-priced essentials drove consumers to their stores at a time of economic uncertainty and tariff refunds provided an earnings boost. Shares of Dollar General jumped about eight per cent in premarket trading as the company also raised its annual sales forecast. Dollar Tree stuck to its annual sales target for a second time this year and forecast current-quarter profit below estimates, sending its shares down about 7 per cent. Customers looking to stretch their budgets are hunting for cheaper groceries and everyday pantry items, and shopping at discount and club stores as they wrestle with higher gas and food prices. Discount retailer Burlington Stores also reported an 11 per cent rise in quarterly sales and said it would invest its tariff refunds of about US$55 million into providing more value for shoppers. “Over the last few years, the rising cost of living has made life difficult for many customers,” said CEO Michael O’Sullivan. Results from the dollar stores underscore a growing divide in the U.S. economy, with lower-income consumers trading down to more affordable options and putting off discretionary spending, even as higher-income households splurge on nice-to-have items. Last week, retail bellwether Walmart reported a rare quarterly sales miss, highlighting weakness in consumer spending, while U.S. President Donald Trump warned that fuel prices could remain high as the war in Iran drags on. Retailers from Walmart to Target are, in part, investing their tariff refunds on cutting prices on thousands of items across grocery and general merchandise in the hope that it would stimulate spending. Other retailers that have reported their quarterly results so far have warned of a “selective” consumer, who has tightened budgets but still manages to make “treat” purchases. Dollar General’s quarterly same-store sales rose 3.5 per cent from a year earlier with growth in categories such as seasonal, home products and apparel. It raised its annual same-store sales growth target to 2.5 per cent to 2.9 per cent from 2.2 per cent to 2.7 per cent earlier. Both dollar store operators joined several consumer-facing companies in noting the benefits from tariff refunds, helping them lift their full-year profit targets. Dollar General expects fiscal 2026 profit per share to be about US$7.80 to US$8.00, which includes an estimated benefit from tariff refunds, after related re-investments, of roughly 25 cents. Dollar Tree raised its annual profit forecast to between US$7.70 and US$8.05 per share, including a roughly 60 cent benefit from tariff refunds. --- Reporting by Anuja Bharat Mistry, Juveria Tabassum and Shania S Thomas in Bengaluru; Editing by Jonathan Ananda and Devika Syamnath)
