Dollar General is one of the best stock performers of Trump’s first 100 days

Dollar General is among the best-performing stocks in the first 100 days of President Donald Trump’s second term.

Since Trump’s Jan. 20 inauguration, shares of the discount retailer have soared more than 36% as of Tuesday’s close, the third-largest percentage-point rise in the S&P 500 behind software company Palantir and tobacco giant Philip Morris International. It’s far outperformed the consumer staples sector as a whole, which is up 6% since the inauguration as of end of trading Tuesday, and climbed higher than competitors like Dollar Tree and Walmart.

Part of the story is an overall market rotation to defensive plays like consumer staples. Amid widespread economic uncertainty, especially around inflation and Trump’s tariffs, investors have pivoted from growth stories to safer harbors.

“Historically, the dollar stores have done better in softer macro environments, especially if we were heading into a recession,” said CFRA Research senior vice president Arun Sundaram.

Stocks plunged in early April when Trump announced steep “reciprocal tariffs” on dozens of trading partners, most of which he later lowered to a universal level of 10% for a period of 90 days.

Dollar General stayed relatively resilient throughout the tariff turmoil and is up 5% in April, while the S&P 500 is still down more than 2% for the month.

Dollar General is less exposed to tariffs than other companies, analysts told CNBC, because of its product mix. Only 4% of its purchases are imports, according to KeyBanc Capital Markets equity research analyst Bradley Thomas.

The retailer makes most of its money from consumable products like food that are less vulnerable to duties than discretionary categories such as seasonal goods and home products, Sundaram said. Consumables accounted for 82.2% of Dollar General’s sales last year, compared with just 48.8% of sales at Dollar Tree.

That mix reduces Dollar General’s reliance on Chinese imports, Sundaram said, which are currently taxed at an effective tariff rate of 145%. China and the U.S. have been in an apparent standoff in trade negotiations.

Dollar General stock has also been recovering from a steep plunge in August after the company issued a disappointing earnings report and cut guidance for the year. Dollar General shares are still down more than 36% from their 52-week closing high, notched last May, and have fallen almost 65% from their all-time closing high from October 2022.

“This is a stock that’s been beaten up pretty hard over the last several years,” Sundaram said.

Dollar General CEO Todd Vasos has been working on a turnaround since returning to the company in October 2023. A back-to-basics focus on productivity and existing stores has contributed to its recent success, said Telsey Advisory Group senior research analyst Joe Feldman.

Analysts said the company continues to face stiff competition from retail giants like Walmart, Amazon and Costco. Those behemoths have more robust online presences that give them an edge over dollar stores, especially as Walmart’s e-commerce membership business, Walmart+, continues to grow.

“Walmart is the big, 800-pound gorilla that Dollar General is up against,” Thomas said. “We see a risk that the dollar stores as a sector, more broadly, will be losing some traffic to the growing delivery business of Walmart+.”

The macro outlook could also provide further headwinds, especially if Trump’s tariff pause lapses without trade deals. Tariff-driven inflation, as well as a potential expiration of Trump’s 2017 tax cuts and proposed changes to the Supplemental Nutrition Assistance Program, could place extra pressure on Dollar General’s lower-income base.

The discounter has benefited from more middle-income “trade-down” shoppers, who could help offset losses from low-income customers, Feldman said, but its core customer is already stretching their dollar.

“The demand is strong from their customer, but the ability to fulfill that demand is not as strong these days,” Feldman said. “That’s really their one issue to be watching here.”