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Dollar General might have beat on EPS on yesterday morning’s earnings report, but the road ahead is a bumpy one that will be tough for the company in the near-term. The company saw consumables grow as a percent of sales in the third quarter but at a decelerating rate sequentially on a trailing twelve month basis. Q4 comps will be particularly difficult as one of Dollar General’s competitors, Family Dollar (FDO), has started offering tobacco products at its stores as a way to achieve its comp (something no other dollar store is doing at the moment). Lastly, DG’s inventories are outpacing sales growth this quarter; more bad news that makes next quarter a difficult one to manage.

DG: Smokes And Mirrors - DG CatMix