Dollar General Shares Jump 20.9% After Earnings Beat Expectations

Dollar General Corp. (DG) posted a significant stock rally on Friday, with shares climbing 20.9% in after-hours trading following the release of its fourth-quarter financial results. The jump marks one of the most pronounced intraday gains for the discount retailer in recent months, reflecting strong investor confidence in its latest performance. The company reported adjusted earnings per share of $2.18 for the quarter, surpassing the consensus estimate of $2.04. Revenue reached $24.8 billion, a 6.4% year-over-year increase, fueled by a 4.7% rise in same-store sales. The improvement was attributed to disciplined inventory management, higher customer traffic, and stronger demand in core grocery and household essentials categories. Gross margin expanded by 110 basis points to 27.6%, driven by favorable supply chain conditions and reduced markdowns. Operating expenses as a percentage of sales declined to 17.8%, down from 18.1% in the prior-year quarter. These metrics indicate improved operational efficiency and pricing power in a challenging retail environment. The stock surge has drawn attention from both retail analysts and institutional investors, with several firms upgrading their ratings on DG. However, some market participants are cautioning that the stock may have run ahead of fundamentals, particularly given its elevated valuation multiples. The company’s forward P/E ratio now stands at 14.3, above the sector average for discount retailers, suggesting a potential risk if future earnings growth slows. The sharp move has prompted discussions about whether to take profits, especially as broader market volatility increases. Traders are monitoring upcoming guidance and inventory levels for signals on sustainability of the current momentum.