The reason why the dollar’s general share price increased by 5% while the market was riding a tank

It was a good day for the dollar general stock in the red sea.

Dollar General (NYSE: DG) Stocks on Thursday, on Thursday, discount retail chains rose 5%, while the rest of the market was on Thursday on Thursday.

The catalyst for this measure was Dollar General’s fourth quarter imported release, which was a mixed bag. But investors saw a bright point in the report and raised the stock price.

Net sales increased 4.5% year -on -year to $ 10.3 billion, which was a bright point of the dollar. This was slightly higher than $ 10.26 billion. The same store sales increased 1.2% compared to the fourth quarter of 2023 and the average transaction amount increased 2.3%.

In a year, net sales increased 5% to $ 46 billion. The same store sales increased by 1.4% year -on -year, up 1.1% of customer traffic and 0.3% increase in average transactions.

Net profit was a different story because the chain earned $ 112 million in quarter, which was less than half of $ 422 million in the fourth quarter of 2023. The income was 87 cents per share, and estimates were missed at $ 1.83 per share a year ago.

But there are huge warnings that most analysts have not known their estimates. Dollar General is reviewing a large -scale portfolio optimization according to CEO toDD VASOS. As part of this review, we closed $ 96 general and 45 pop shot stores and switched six pop fans to the dollar.

This review was charged for damaged costs of $ 223 million or 81 cents per share for the closure of the store. It brought a big bite from income, otherwise it would have won the estimates.

VASOS said, “The number of closures is less than 1 % of the total store -based, but I think this decision is in a better position to provide services to customers and communities.

Stocks rise from views

In many ways, Dollar General is a bell of economic condition. When economic growth is slow or negative, it tends to surpass other stocks, delaying other retailers at a good time.

It can explain why stock prices have been low in the last few years, but we have overpowered our competitors this year.

With a deep discount, you accept low -income and medium income shoppers at a low price. But when time is rough, more people get more medium and upstream shoppers when more people try to spread the dollar more.

“Customers continue to report that last year’s financial situation has worsened because it had a negative impact on continuous inflation. Many customers reported that they only had money for basic necessities.

And he does not expect to improve the mobilization environment in 2025.

Vasos said, “We are doing our best to provide the value we need, and we continue to feel good about our daily low price compared to our competitors and other classes,” Vasos added.

In 2025, Dollar General’s outlook showed steady growth, net sales growth was 3.4%to 4.4%, and the same store sales increased from 1.2%to 2.2%. The diluted EPS is about $ 5.10 to $ 5.80 per share compared to $ 5.11 per share in 2024.

10% growth in 2026

Considering that the economy is uncertain and is likely to slow down, the short -term prospects are solid. However, Dollar General plans to increase capital spending to add 15 new stores in the United States and Mexico this year, so long -term prospects are better. We also plan to plan more than 4,000 of 20,594 stores.

Through this new store and remodeling, Dollar General aims to grow 10% EPS in 2026 and pleases investors.

Dollar General’s consensus price target is $ 84, suggesting 8%growth. In this environment, it is not bad at all. And it is cheaper and traded with 12 times of income and has a tail wind for long -term growth.