Dollar General (DG) Stock Forecast & Price Target

Dollar General has demonstrated strong financial performance, with fiscal 2024 sales reaching $40 billion and a year-over-year revenue growth of 4.6%, amounting to $10.7 billion in Q3. The company achieved a comparable store sales increase of 2.5%, surpassing market expectations, while operating margins expanded by 82 basis points to 4.0%, primarily driven by improved gross margins and lower shrink. Furthermore, the company's strategy of focusing on rural and low-income markets, alongside its diverse product range and the growth of private label offerings, positions it favorably for continued success in the discount retail space.

Dollar General's SG&A expense ratio increased to 25.9%, reflecting higher costs related to incentive compensation and maintenance, which may pressure profitability. The retailer faces significant risks, including volatility in commodity costs, rising interest rates, and weaker consumer confidence, which could adversely affect its core lower- and middle-income customer base. Additionally, increased competition and macroeconomic challenges, such as tariffs and inflation, could further hinder the company's financial performance moving forward.