Dollar General (DG)

The market will focus on the 5.2% sales beat, but the real story is that delivery’s claimed 80% sales‑incrementality is an unsubstantiated absolute that may be plateauing, while a one‑off tariff boost inflated gross margin. The binding constraint is the limited scalability of the delivery network and the loss of future tariff benefits, which will pressure margins once the fuel‑cost headwinds persist. Management’s refusal to disclose incentive‑comp expense and the vague AI narrative signal that the underlying cost picture is less clear than presented. My view changes if Q3 delivery contribution falls below 50 bps or if incentive‑comp expense exceeds $250 M.