Discount juggernaut Dollar General is delaying 70 new store openings this year as it redirects capital to remodel more brick-and-mortar sites.

The Goodlettsville, Tennessee-based chain, which has 20,149 stores, offered an update on its real estate plans during a first-quarter earnings call on Thursday morning. During the quarter, the retailer posted a 6.1% rise in sales to $9.9 billion, compared with the prior year.

Dollar General has been one of the most aggressive U.S. chains in terms of expanding its physical footprint, in March reiterating its goal of opening 800 stores this year, as well as doing 1,500 remodels and 85 store relocations. But company officials told Wall Street analysts that Dollar General now instead plans to debut just 730 stores, bump up the number of remodels to 1,620 and keep with its 85 relocations.

So now the 70 delayed new stores will instead open their doors next year, according to Kelly Dilts, Dollar General's chief financial officer. The retailer is looking to better optimize its planned capital expenditures for fiscal year 2024 and to expand its investment in mature stores.

"We believe this is an appropriate reallocation of our capital. ... We feel really good about the locations that we've identified," Dilt said. "We're just pushing them out into 2025."

Neil Saunders, a retail analyst and managing director of GlobalData, in an email to CoStar News said that he couldn't immediately think of any other company pulling back on store roll-outs, "but very few retailers open as many stores as Dollar General each year so there’s probably less scope for others to pare back."

For the full year, Dollar General plans capital expenditures ranging from $1.3 billion to $1.4 billion.

Dollar General's growth stands in contrast to direct rival Chesapeake, Virginia-based Dollar Tree, which in March said it would shut 1,000 stores, nearly all of them Family Dollar locations with just a few dozen of its namesake locations on the list. The first 600 of those store closings are slated for this year, with the rest coming as store leases expire.

During the first quarter, Dollar General opened 197 new stores, remodeled 463 stores and relocated 21 stores, according to CEO Todd Vasos.

In that period, the retailer said it spent $342 million on its properties, including: $132 million for improvements, upgrades, remodels and relocations of existing stores; $117 million related to store facilities, primarily for leasehold improvements, fixtures and equipment in new stores; $78 million for distribution and transportation-related projects; and $13 million for information systems upgrades and technology-related projects.

In the first quarter, Dollar General had a same-store sales increase of 2.4%, while its operating profit declined 26.3% to $56.1 million.

Vasos said "shrink," loss of inventory through theft or misplacement, was pacing ahead of the retailer's expectations this year. And the chain's lower-income customers' spending continues to be impacted by high inflation, according to the CEO.

"We believe the softness in sales in the discretionary category during Q1 is a reflection of the continued pressure on our core customers feel on their spending," Vasos said.

Saunders issued a note to clients on Dollar General's results on Thursday.

"Last year was a torrid one for Dollar General as the chain stumbled across several areas and comparable sales dipped into negative territory for some quarters," Saunders said. "The company has started to address its issues and, as a result, it has kicked off its first quarter of the new fiscal on a more positive note. Overall sales grew by a robust 6.1%, mostly driven by the continued opening of new stores ... This is a reversal of the anemic performance over the past three quarters, albeit one that comes off the back of a more modest prior-year comparative. Our view is that many of the steps taken to improve store environments and ensure better availability of products have made a significant difference to the sales line; and there should be more gains as standards and operations benefit from more discipline."

Dollar General's policy is to not comment on analyst reports, a company spokeswoman said in an email to CoStar News.

On the earnings call, Vasos described pending changes to Dollar General's supply chain. Last year the retailer said it planned to exit 12 temporary warehouse facilities to cut costs and improve inventory flow. Since then it has vacated seven of those locations, and will be out of the remainder by the end of the year, Vasos said. Dollar General is slated to have two new permanent distribution centers, in Arkansas and Colorado, open by the end of the year, as well, according to the CEO.

Saunders said Dollar General's customers won't be likely to get any financial relief soon, impacting the chain.

"Under the headline sales numbers, Dollar General continues to be buffeted by some unfavorable headwinds," Saunders said. "Foremost among them are the financial constraints on core customers, who continue to have their incomes squeezed by inflation. While this helps to shore up their loyalty to Dollar General, it also means they are less inclined to buy discretionary items at the store and stick much more closely to their needs in the essentials categories. This acts as a brake on both volume and sales growth. The declines in non-consumable product sales also have a dampening impact on margins and profitability."