June 2 (Reuters) - Dollar General raised its annual profit forecast on Tuesday, mirroring rival Dollar Tree, as the discount retailers bank on shoppers seeking affordable essentials amid economic uncertainty.
Shares of the company, which beat quarterly profit estimates, were up nearly 5% in premarket trading.
Rising gasoline prices due to the Iran war are further pressuring consumer budgets already strained by factors such as U.S. import tariffs and AI-related labor market uncertainty, benefiting dollar-store operators like Dollar General.
"We believe the essential nature of our offering and our expansive footprint position us well to navigate the current macroeconomic environment," CEO Todd Vasos said in a statement.
Dollar Tree, as well as discount apparel retailers TJX and Ross Stores, have raised annual forecasts, underscoring a sustained shift toward value.
Meanwhile, big-box retailers Walmart and Target recently warned of muted consumer spending.
Dollar General forecast fiscal 2026 earnings per share of $7.20 to $7.45, up from its prior outlook of $7.10 to $7.35, and said it does not factor in any potential impact from tariff refund payments.
It continues to expect annual same-store sales to grow between 2.2% and 2.7%.
Dollar General's dense, hyper-local footprint positions it to capture short-distance shopping trips at a time when consumers are watching fuel budgets, data firm Placer.ai said.
The company posted a quarterly sales rise of 3.4% to $10.79 billion, broadly in line with analysts' estimates of $10.81 billion, and posted a profit of $2 per share, compared with analysts' estimates of $1.89 a share, according to compiled by LSEG.
Dollar General added that it incurred significantly higher fuel costs in the reported quarter and expects the trend to continue.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Leroy Leo)
