What long-term trends can investors expect from DG's EPS in 2026?

**Dollar General's EPS is expected to show a decline in 2026** due to a combination of factors that are likely to impact the company's financial performance:

1. **Strategic Store Closures and Remodeling**: Dollar General plans to close nearly 100 stores and 45 Pop Shelf sites, and convert some Pop Shelf stores to Dollar General stores. These closures and conversions are likely to lead to impairment charges, as seen in the Q4 2024 earnings report, which negatively impacted operating profit and EPS. While the company is refreshing its stores and expects these refreshes to positively impact sales growth, the short-term impact of closures and remodeling is likely to be negative.
2. **Economic Pressures on Core Customers**: The company has noted a deterioration in its shoppers' financial situations over the past year due to inflation, with many customers struggling to afford basic essentials. This trend is likely to continue, putting pressure on the company's financial performance as it expects no improvement in this situation this year.
3. **Tariff Impacts**: Although Dollar General believes it can mitigate the impacts of tariffs this year, as it did in 2018 and 2019, there is still uncertainty around government entitlement program changes. These uncertainties could lead to additional costs or disruptions that might affect EPS.
4. **Inventory Management and Shrink Mitigation**: Dollar General has seen a 4% decrease in merchandise inventories compared to the previous year, indicating efficient inventory management. Additionally, the company has made successful strides in shrink mitigation, expecting benefits through 2025. These are positive factors that could support EPS in the long term.

In conclusion, while Dollar General is making strategic moves to enhance its store portfolio and manage inventory efficiently, the immediate impact of closures and economic pressures is likely to weigh down on EPS in the short term. The company's ability to mitigate the effects of inflation on its core customer base and manage tariff impacts will be crucial in determining its long-term EPS trajectory in 2026.