What caused DG's net profit decline in 2025?

Dollar General's net profit decline in 2025 can be attributed to a combination of factors: 1. **Store Closures**: The company announced the closure of 96 Dollar General stores and 45 Popshelf locations in early 2025. While these closures represent less than 1% of the total store base, they still indicate a strategic shift aimed at optimizing underperforming locations. 2. **Economic Challenges and Shifting Consumer Spending**: Dollar General faces economic challenges and shifting consumer spending habits, leading to the need for store closures. The retailer cited a "store portfolio optimization review" based on individual store performance, projected future earnings, and operating conditions. 3. **Inflation and Economic Uncertainty**: High inflation and economic uncertainty have impacted consumer spending, affecting Dollar General's profitability. The company noted that many customers are struggling to afford basic essentials, leading to a trade-down in purchasing behavior. 4. **Strategic Cost Controls**: Despite the net income decline, Dollar General has implemented strategic cost controls to mitigate the impact. The company outlined an EPS guidance of $5.10 to $5.80 for 2025, indicating a focus on profitability. In conclusion, Dollar General's net profit decline in 2025 is a result of a combination of store closures, economic challenges, inflation, and strategic cost controls. These factors have collectively impacted the company's financial performance, leading to a decline in net income.