Dollar General Corporation (DG) and Dollar Tree Inc. (DLTR) are about to give us a window into how American consumers are really shopping right now, especially as tariffs and inflation continue to squeeze household budgets. Dollar General reports Thursday morning before the bell, while Dollar Tree goes first on Wednesday.

Here's what the numbers look like heading in, what analysts are watching, and why guidance might matter more than the actual quarterly results.

What Wall Street Expects

For Dollar Tree, analysts are looking for third-quarter revenue of $4.70 billion. That's down sharply from $7.57 billion a year ago, but there's a catch: last year's figure included Family Dollar, which the company sold off earlier this year. Strip that out, and it's really an apples-to-apples comparison of a slimmer, more focused operation.

The company has been on a nice streak, beating revenue estimates for four consecutive quarters and in seven of the last ten overall. On the earnings side, analysts expect $1.08 per share, down slightly from $1.12 last year. Dollar Tree has beaten EPS estimates in four straight quarters and six of the last ten.

Dollar General is expected to post revenue of $10.64 billion, up from $10.18 billion in last year's third quarter. The company has beaten revenue estimates in five of the last ten quarters, including most recently in Q2. Earnings are projected at 95 cents per share, up from 89 cents. Dollar General has beaten EPS estimates three quarters running and in six of the last ten overall.

The Dollar General Story: Traffic Up, But SNAP Troubles Loom

Piper Sandler analyst Peter Keith thinks expectations might be running a bit hot going into Dollar General's report. He's sticking with a Neutral rating and $108 price target, but he's flagging some concerns.

The main worry? Spending from lower-income consumers may have cooled during the third quarter. More significantly, the government shutdown and disruptions to SNAP benefits could put a dent in fourth-quarter revenue, which would show up in guidance. Keith estimates that roughly 5% of Dollar General's sales come through SNAP payments.

"We believe this limits DG upside to FY25 guidance," Keith noted.

There's a silver lining, though. Keith sees Dollar General picking up market share among higher-income consumers during the quarter. Apparently, even people with more money are feeling the pinch and trading down to discount stores.

Freedom Capital Markets Chief Market Strategist Jay Woods is more bullish on the setup. He pointed out that Dollar General is benefiting from strong store traffic growth, which should help same-store sales. "Last quarter they noted their average basket size is growing, and management recently raised its full-year outlook," Woods said.

Woods is watching the stock chart closely. He sees several bullish technical signals and thinks if shares can break through $116, they could challenge old highs. "Look for shares to eclipse the $116 level on a positive report. It is clearly in a sector with strong relative strength and still has a lot to reverse," he added.

The Dollar Tree Situation: Post-Family Dollar Life

Over at Dollar Tree, Keith is less optimistic about traffic trends. He's maintaining a Neutral rating with a $117 price target and expects the company to basically meet expectations and stick with existing guidance.

The big question mark is whether management hints at a sluggish fourth quarter so far, partly due to those same SNAP headwinds. Keith also did some price checking at Dollar Tree stores and found prices running higher than Walmart, which could send bargain hunters elsewhere.

Then there's the tariff situation. Keith thinks the impact could really ramp up in the second half of 2025 for Dollar Tree, though the company might offset some of that by bumping prices on certain items to $1.50 or $1.75.

Woods sees the Family Dollar divestiture as a turning point. "DLTR is starting to see the benefits of its sale of Family Dollar. Divesting that unit for quite a loss seems to have removed a drag on their overall business and cleared the way for a leaner, more focused discount-retail model," he said.

What Really Matters: Competition and Traffic Trends

Beyond the headline numbers, investors should pay attention to what both companies say about market share. Amazon.com Inc. (AMZN) is getting more aggressive in territory that used to belong to discount retailers, particularly with Amazon Grocery, which now features over 1,000 food items with many priced under $5.

Amazon said its private-label brands gained serious momentum in 2024, with customers buying 15% more private-brand products than the year before. That matters because customers often trade down from brand-name products to private-label to save money on groceries, and if Amazon is capturing that trade-down behavior, it's coming at someone's expense.

There's some good news in the data from Placer.ai, which tracks foot traffic. Both Dollar General and Dollar Tree saw year-over-year increases in visits during the third quarter.

Dollar General visits jumped 4.9% year-over-year in Q3, which is actually an acceleration from the 2.1% and 4.3% gains in the first and second quarters. That's a positive trend.

Dollar Tree saw visits up 4.3% year-over-year in the third quarter, but that's a deceleration from the 5.5% and 12.7% growth rates in Q1 and Q2. That weaker momentum could suggest Dollar Tree faced more headwinds than Dollar General during the period.

The October data might be even more telling for fourth-quarter guidance. Dollar General's visits grew 6.0% year-over-year, while Dollar Tree managed just 2.8% growth. If that gap persists, it could mean Dollar General is in better shape heading into the holidays.

The Stakes: Nearly Identical Stock Performance

Dollar General stock is trading at $109.60, within a 52-week range of $66.43 to $117.95. Shares are up 44.9% year-to-date in 2025.

Dollar Tree is at $108.94, with a 52-week range of $61.80 to $118.06. The stock is up 42.5% year-to-date.

With both stocks trading in similar ranges and showing nearly identical year-to-date gains, this week's earnings reports and especially the guidance could be the separator that determines which discount retailer Wall Street favors heading into 2026. The setup is almost perfect for a head-to-head comparison: same sector, similar price action, same macro challenges. Now we'll see which one executes better.