Dollar General has been anything but a bargain this year.

This week's earnings report is a chance for the company to regain some lost momentum, but it must paint a more upbeat picture than Walmart presented last week. That's easier said than done.

Dollar General is in the red so far in 2026; that's in contrast to Dollar Tree, as well as its own stellar 2025 performance.

Dollar General, the larger of the two main dollar stores, has traditionally sold more essentials than discretionary items, and has struggled the most in the postpandemic years. Investors are concerned not only about the balance sheets of its lower-income shoppers, but increasing competition from the likes of Walmart.

Although it earned more than $10 a share in the 2021 to 2023 period, analysts don't expect EPS to reach double digits again until fiscal 2031. Consensus calls for Dollar General to earn $2.01 on sales of $11.2 billion when it reports second-quarter results on Thursday.

The company has its work cut out for it: Gas prices remain high, which hits its core consumer harder than others, at the same time that Walmart has been cutting prices, putting pressure on Dollar General to do the same. The new CEO still has to win over Wall Street.

That said, expectations are already low: Not only have the shares tumbled this year, but Walmart's earnings led to that stock's worst day in years last week.

Dollar General doesn't face the same drug price headwinds as Walmart, but even accounting for that issue, the world's largest retailer's same-store sales were disappointing. Given its focus on lower-income and price sensitive shoppers, investors may worry Dollar General will face similar weakness and margin-eroding pressure to keep prices low.

And Dollar General's bottom line has beaten expectations every quarter for more than a year. (Not that that's always been enough to lift the stock.) Ongoing comparable sales momentum could be another plus.

We'll know soon enough which scenario plays out.