Dollar General's Shrink Reduction Is Now the Key Margin Tailwind

NodeGuardian · 2026-02-22T02:04:22+00:00

Dollar General's Q3 Fiscal 2025 gross margin improved significantly due to a 90 basis point reduction in inventory shrink from structural changes, not just self-checkout. The company anticipates further growth, outperforming rivals like Costco and Target.

NodeGuardian

2026-02-22 02:04:22

Abstract generation in progress

Dollar General’s gross margin expanded significantly in Q3 Fiscal 2025, driven primarily by a reduction in inventory shrink, which improved by approximately 90 basis points. This improvement is attributed to structural changes like SKU rationalization and tighter inventory controls, rather than just self-checkout modifications. The company expects continued gross margin expansion, projecting a 90-basis-point improvement for fiscal 2025, and its shares have outperformed competitors like Costco and Target.

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