Dollar General (NYSE:DG) reported first-quarter net sales and earnings that exceeded Wall Street expectations, prompting the discount retailer to raise its full-year financial guidance despite ongoing uncertainties surrounding the impact of U.S. tariffs.

Like many in the retail sector, Dollar General had initially taken a cautious stance on the coming months as companies try to gauge how tariffs might influence consumer spending. Economists have warned that these duties could increase inflationary pressures and potentially slow overall economic growth.

However, on Tuesday, Dollar General expressed confidence that, following a strong performance in the most recent quarter, it can offset a significant portion of the tariffs at their current levels. The company also cautioned that consumer spending may still face challenges due to price increases linked to the tariffs.

Assuming tariff rates remain steady through mid-August, Dollar General now projects net sales growth of between 3.7% and 4.7% for fiscal 2025, up from an earlier forecast of approximately 3.4% to 4.4%. Same-store sales are expected to rise about 1.5% to 2.5%, compared to the previous guidance of 1.2% to 2.2%.

The company also updated its diluted earnings per share forecast to a range of $5.20 to $5.80, slightly higher than its prior estimate of roughly $5.10 to $5.80.

Dollar General noted that its revised guidance accounts for potential easing in the trade tensions between the U.S. and China.

For the quarter ending May 2, net sales climbed 5.3% year-over-year to $10.44 billion, surpassing Bloomberg’s consensus estimate of $10.28 billion. Operating profit rose 5.5% to $576.1 million, beating expectations of $489.8 million. Earnings per share increased to $1.78 from $1.65 in the previous year.

Following the results, Dollar General shares jumped during premarket trading in the U.S.

Dollar General stock price