Dollar General (ticker: DG) raised its annual sales and profit forecasts on Thursday, capitalizing on steady demand from cost-conscious consumers across all income levels as the U.S. market faces concerns over tariffs and inflation.

The company's shares rose approximately 6% in pre-market trading, bringing its year-to-date gains to nearly 47%.

Traditionally, dollar stores perform better during economic downturns as budget-conscious consumers turn to these retailers for affordable necessities.

Earlier this year, Dollar General noted that while low-income consumers struggle to afford even basic necessities, the company's low-price merchandise mix has also attracted more high-income shoppers to its stores.

Retail bellwether Wal-Mart (ticker: WMT) has similarly attracted high-income consumers who visit its stores for low-priced groceries. Earlier this month, Wal-Mart also raised its annual sales targets.

Dollar General stated on Wednesday that it has factored "potential uncertainties related to consumer behavior" into its annual guidance.

For the quarter ended August 1, the company's same-store sales grew 2.8% year-over-year, exceeding market expectations of 2.5% growth. This performance was driven by increased customer traffic and higher spending per customer.

Dollar General now expects net sales growth of 4.3% to 4.8% for 2025, compared to its previous forecast range of 3.7% to 4.7%.

On the profit front, the company projects annual earnings per share of $5.80 to $6.30, up from its previous target range of $5.20 to $5.80.

Additionally, the company's second-quarter adjusted earnings per share reached $1.86, significantly above market expectations of $1.57.