While everyone spent this week watching AI earnings, two retailers quietly told a more interesting story about how Americans are actually spending their money right now.
Dollar General and Ulta Beauty both reported this week. Both beat expectations. Both raised guidance. And together, they paint a picture of the American consumer that Wall Street keeps underestimating.
Here are three names worth watching based on what we learned.
Dollar General (DG)
Dollar General serves lower-income Americans more than almost any other retailer. If anyone was going to crack under the weight of 3.8% inflation and zero rate cuts, it was going to show up here first.
Instead, the company reported earnings per share of $2.00 — up 12.4% from last year and above what analysts expected. Revenue came in at $10.8 billion. Management raised full-year EPS guidance to a range of $7.20 to $7.45, which was above their previous forecast.
The CEO’s commentary was the part I paid attention to. He said demand trends are holding up and that core customers are “managing well.” That’s not a sign of consumer distress. That’s a sign that even the most price-sensitive shoppers are still buying necessities at a regular clip. Dollar General opened 190 new stores in the quarter. You don’t open that many stores if you’re worried about traffic drying up.
The stock is around $125. The full-year guidance raise is the signal worth noting.
Ulta Beauty (ULTA)
Beauty spending is one of the first things people cut when money gets tight. That’s why Ulta’s report this week was so telling.
Net sales grew roughly 11% from a year ago. Comparable sales — the number that shows whether existing stores are getting more traffic and bigger purchases — rose 5.3% against an analyst estimate of 4.6%. Diluted earnings per share came in at $7.74, up 15.5% year over year. Ulta reaffirmed its same-store sales guidance for the full year.
People are still spending on lipstick, skincare, and fragrance. They’re still going to the salon. The “affordable luxury” category hasn’t collapsed under inflation. That’s a data point worth understanding.
Five Below (FIVE)
Five Below reports tonight after the close, which makes this a watchlist pick rather than a post-earnings observation. The company sells products mostly priced at $5 and below — toys, snacks, beauty basics, seasonal items — to younger shoppers and budget-conscious families.
Given what Dollar General and Ulta just told us, the setup going into tonight is interesting. If the lower-income consumer is doing okay (Dollar General says yes) and if discretionary spending is holding up even in beauty (Ulta says yes), then a teen-focused extreme-value retailer should have its own version of that story to tell.
Analysts are expecting modest same-store sales growth. A beat tonight would confirm what the other two retailers already suggested: the American consumer is more resilient than the inflation headlines imply.
Watch Five Below tonight. After what we heard this week, the bar for a beat isn’t that high.
