Dollar General (DG.N): Expect Inline 2Q EPS and Reiteration of F26 Guidance; How Will Mgmt Sound on WMT Price Investments?

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11 Aug 2026 05:00:00 ET │ 22 pages

Dollar General (DG.N)

Expect Inline 2Q EPS and Reiteration of F26 Guidance; How Will Mgmt

Sound on WMT Price Investments?

CITI'S TAKE

We expect 2Q EPS of $1.99 (vs cons $1.99) with comps of +2.7% vs cons

+2.7%. Given WMT’s plan to use tariff refunds to invest in price high-turn

food and consumable categories, we expect mgmt to maintain a balanced

view of 2H and reiterate F26 guidance. Though DG mgmt has characterized

the environment as rational, we believe WMT’s actions pose a risk for DG’s

2H results. We are taking a more conservative view of 2H and taking our 3Q

EPS to $1.30 vs $1.34 previously (and vs cons $1.37) and 4Q EPS to $1.91 vs

$1.99 previously (and vs cons $2.01). The stock is up ~20% since their last

earnings call, which may indicate the market is hopeful for an increase in

guidance, which we believe skews the risk/reward to the downside.

Ests: Our 2Q est goes from $1.93 to $1.99 as we now expect comps at the high-end

of guidance (of +2.2-2.7%) to +2.7% (vs cons +2.7% and market expectations of

~+3%) vs +2.5% previously. However, we are incrementally more cautious on 2H as

we believe Walmart’s price investments will likely be a headwind to DG’s traffic. We

now estimate 3Q EPS of $1.30 vs $1.34 previously (and vs cons $1.37) and 4Q EPS of

$1.91 vs $1.99 previously (and vs cons $2.01). Our F26/27 EPS goes from $7.25/7.72

to $7.21/7.71.

n

Neutral

Short-Term View: Downside

Price (10 Aug 26 16:00)

US$122.42

Target price

US$116.00

Expected share price return

-5.2%

Expected dividend yield

1.9%

Expected total return

-3.3%

Market Cap

US$27,004M

Price Performance

(RIC: DG.N, BB: DG US)

Guidance: We expect mgmt to reiterate F26 guidance, but will likely acknowledge

maintaining a balanced view on 2H as competition heats up with Walmart investing

tariff refunds into food and consumables (DG will not have the same tariff refund

benefit). We expect mgmt to reiterate their F26 comp guide of +2.2-2.7% vs cons

+2.4%, and EPS guidance of $7.20-7.45 vs cons $7.38.

Foot traffic: Based on our Citi Traffic Tracker, DG traffic decelerated in 2Q26 to +1.6%

vs 1Q26 +3.9%. (see Figure 4).…