Dollar General Likely To Benefit From Inflation Driven Customer Traffic, Says Analyst

Telsey Advisory Group analyst Joseph Feldman reiterated an Outperform rating on the shares of Dollar General Corp DG with a price target of $280.00.
The analyst noted that DG reported a Q2 earnings beat, driven by better-than-anticipated sales and profitability, reflecting the impact of inflation and consumers continuing to increase reliance on Dollar General amidst a challenging economic environment.
The analyst said the Q2 comparable sales reflect increases in both traffic and average ticket, with sales being strongest in consumables.
Feldman added that, like most retailers, Dollar General is facing pressures from lapping the U.S. government stimulus and elevated costs.
The analyst expects the company’s business to grow as consumers continue to increase their reliance on Dollar General.
He also cited Dollar General’s performance to be driven by new stores and remodels and a number of initiatives, including the expansion of cooler doors, DG Fresh supply chain upgrades, Fast Track inventory/labor management, and the expansion of non-consumables initiatives.
Price Action: DG shares are trading lower by 1.46% at $243.83 on the last check Thursday.
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