Dollar General and Dollar Tree both beat second-quarter expectations in reports released August 27, but only Dollar General's stock was rewarded. Dollar General's net sales rose 5.2% to $11.29 billion, diluted EPS came in at $2.48, up 33.3% year-over-year, and same-store sales increased 3.5%, prompting management to raise full-year same-store sales guidance to 2.5% to 2.9% and full-year EPS guidance to $7.80-$8.00, while announcing plans to resume up to $700 million in share buybacks. Dollar Tree's revenue rose 7% year-over-year to $4.89 billion and diluted EPS was $2.70, but $1.31 of that figure came from the net impact of $383 million in IEEPA tariff refunds, leaving underlying EPS of $1.39, about 23% above the $1.13 consensus estimate. Despite that underlying beat, Dollar Tree shares fell about 3% to 4% after management guided third-quarter EPS to $0.80-$0.95, well below the $1.39 analyst average, citing roughly $0.50 per share of reinvestment of tariff refunds in pricing and margin pressure from a 40th anniversary $1 price-point campaign. Hedge fund ownership rose for both retailers, with Dollar General funds increasing from 47 to 53 and Dollar Tree from 43 to 54, though Dollar Tree's short interest stood higher at 4.15% versus Dollar General's 2.97% of float.
Dollar General CorporationDollar General beat Q2 estimates, raised full-year same-store sales and EPS guidance, and announced resuming up to $700 million in buybacks.
Dollar Tree IncDollar Tree's Q3 EPS guidance of $0.80-$0.95 came in well below the $1.39 consensus, sending shares lower despite an underlying Q2 beat.
