A chain of small-box discount stores selling everyday basics like groceries, cleaning supplies, and seasonal home goods at low prices. It began in 1939 in Scottsville, Kentucky, as J.L. Turner and Son; the name came from the founders' idea that every day should feel like a department store's "Dollar Day" sale. It expanded into Mexico in 2023 as Mi Súper Dollar General and runs a trendier offshoot, pOpshelf, for home décor and party supplies.
Gross margin hit 32.6% as tariff refunds and lower LIFO lifted Q2 operating profit 29.2%.
reached its highest level in over four years. rose 5.2% to $11.3 billion and climbed 33.3% to $2.48, driven by a 3.5% gain and a one-time tariff refund that expanded margin. The company plans to resume share repurchases in the second half of the year.
Key takeaways
expanded 1.3 points to 32.6%, the highest quarterly rate since Q2 FY2022, driven by tariff refunds, a lower , and lower distribution costs, partly offset by higher markdowns and transportation costs.
rose 3.5%, with customer traffic up 2.0% and average transaction amount up 1.5%, accelerating from the 2.0% gain in Q1 FY2026.
rose 29.2% to $769.2 million and rose 33.8% to $550.3 million, with of $2.48.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 net sales rose 5.2% to $11.29B and operating profit rose 29.2%, aided by tariff refunds.
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Q2 rose 5.2% to $11.29B on a 3.5% increase, with customer traffic up 2.0% and average transaction amount up 1.5%.
SG&A held flat at 25.8% of as higher and was offset by lower rent as a percentage of sales.
fell 19.3% to $780.5 million in the quarter, and fell 33.8% to $373.7 million, partly due to a $249.0 million decrease versus a $44.7 million increase a year earlier.
Management expects to resume share repurchases in the second half of fiscal 2026 under the remaining $1.38 billion authorization.
What changed
The Q1 FY2026 watch item on was resolved: margin expanded further to 32.6% from 31.6% in Q1, aided by tariff refunds and a lower that more than offset the markdown and transportation cost pressures flagged earlier.
accelerated to 3.5% from 2.0% in Q1 FY2026, with traffic growth strengthening to 2.0% from 1.4% and average transaction growth rising to 1.5% from 0.5%.
The Q1 FY2026 watch item on materialized: the 15.5% decline in Q1 deepened, with the 26-week period showing a $318.2 million drop partly due to an decrease versus a build a year ago.
The company explicitly stated it expects to resume share repurchases in H2 2026, resolving a watch item that had persisted since FY2023 when buybacks were suspended.
What to watch
Q3 FY2026 against the 32.6% Q2 rate as the tariff refund benefit does not repeat and markdown and transportation cost pressures continue.
Q3 FY2026 to see if the 3.5% gain holds as the company laps a 2.5% gain in Q3 FY2025.
Whether share repurchases resume in H2 2026 as stated, and at what pace, with $1.38 billion remaining on the authorization and cash at $1.59 billion.
trajectory after the 33.8% decline to $373.7 million in Q2, as and movements continue to weigh on cash generation.
expanded 127 to 32.6% in Q2, driven by tariff refunds, a lower , and lower distribution costs, partly offset by higher markdowns and transportation costs.
SG&A held flat at 25.8% of in Q2, as higher and was offset by lower rent as a percentage of sales.
rose 29.2% to $769.2M in Q2, while rose 33.8% to $550.3M and rose 33.3% to $2.48.
fell $318.2M to $1.5B in the 26-week period, partly due to a $249.0M decrease versus a $44.7M increase a year earlier.
The company expects to resume share repurchases in H2 2026 under its remaining $1.38B authorization and projects 2026 of $1.4B to $1.5B.
Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to the disclosures relating to this item from those set forth in our Annual Report on Form 10-K for the fiscal year ended January 30, 2026.
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There have been no material changes to the disclosures relating to this item from those set forth in our Annual Report on Form 10-K for the fiscal year ended January 30, 2026.
The information contained in Note 7 to the unaudited consolidated financial statements under the heading “Legal proceedings” contained in Part I, Item 1 of this report is incorporated herein by this reference.
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The information contained in Note 7 to the unaudited consolidated financial statements under the heading “Legal proceedings” contained in Part I, Item 1 of this report is incorporated herein by this reference.
There have been no material changes to the disclosures relating to this item from those set forth in our Annual Report on Form 10-K for the fiscal year ended January 30, 2026, other than as set forth in the discussion of certain items that have impacted or could impact our bus…
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There have been no material changes to the disclosures relating to this item from those set forth in our Annual Report on Form 10-K for the fiscal year ended January 30, 2026, other than as set forth in the discussion of certain items that have impacted or could impact our business or results of operations during 2026 or in the future as disclosed in the “Executive Overview” section within “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q.