Dollar General (DG) is expected to meet the market's bar for 2% comparable sales growth in Q1, with the company likely to point out that the quarter started out slow due to the impact of the storms early in the three-month period, UBS said in a note emailed Wednesday.

With regard to its guidance, the company is expected to reiterate its full year comp guidance of 2.2% to 2.7%, UBS said. Additionally, Dollar General could bump up the low end of its EPS guidance of $7.10 to $7.35, as a show of conviction in its forecast, according to the note.

The company will reiterate its opportunity to realize its long-term operating margin guidance of 6% to 7%, UBS said, adding that it is forecasting a 5.3% operating margin this year, 5.7% in 2027, and 5.9% in 2028.

UBS noted that Dollar General is beginning to see meaningful tailwinds from newer businesses like e-commerce and retail media, with e-commerce potentially accounting for 20% to 25% of comp growth looking ahead.

Dollar General is scheduled to report its Q1 results on June 2.

UBS maintained its buy rating with a $168 price target.

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