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1. Company Snapshot

1.a. Company Description

Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, Midwestern, and eastern United States.It offers consumable products, including paper and cleaning products, such as paper towels, bath tissues, paper dinnerware, trash and storage bags, disinfectants, and laundry products; packaged food comprising cereals, pasta, canned soups, fruits and vegetables, condiments, spices, sugar, and flour; and perishables that include milk, eggs, bread, refrigerated and frozen food, beer, and wine.The company's consumable products also comprise snacks, such as candies, cookies, crackers, salty snacks, and carbonated beverages; health and beauty products, including over-the-counter medicines and personal care products, such as soaps, body washes, shampoos, cosmetics, and dental hygiene and foot care products; pet supplies and pet food; and tobacco products.


In addition, it offers seasonal products comprising holiday items, toys, batteries, small electronics, greeting cards, stationery, prepaid phones and accessories, gardening supplies, hardware, and automotive and home office supplies; and home products that include kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, and bed and bath soft goods.Further, the company provides apparel, which comprise casual everyday apparel for infants, toddlers, girls, boys, women, and men, as well as socks, underwear, disposable diapers, shoes, and accessories.As of February 25, 2022, it operated 18,190 stores in 47 states in the United States.


The company was formerly known as J.L. Turner & Son, Inc.and changed its name to Dollar General Corporation in 1968.Dollar General Corporation was founded in 1939 and is based in Goodlettsville, Tennessee.

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1.b. Last Insights on DG

Dollar General's recent performance was driven by strong Q3 earnings, exceeding expectations and raising full-year guidance. Net sales increased 4.6% to $10.6 billion, with same-store sales growing 2.5%. The company's turnaround efforts are gaining traction, with analysts citing a favorable macro backdrop and potential for 2-3% same-store sales growth. JPMorgan upgraded the stock to overweight with a $166 price target, citing a solid consumer and growth prospects. The company's strategic expansions and strong sales growth have fueled optimism.

1.c. Company Highlights

2. Dollar General's Q3 2025 Earnings: A Strong Performance

Dollar General Corporation reported a robust Q3 2025 performance, with net sales increasing 4.6% to $10.6 billion and same-store sales growing 2.5%. The company's gross profit margin expanded 107 basis points to 29.9%, driven by lower shrink and higher inventory markups. Operating profit rose 31.5% to $425.9 million, and EPS increased 43.8% to $1.28, beating analyst estimates of $0.945. The company's ability to drive profitable sales growth is evident, with a strong showing in Q3.

Publication Date: Dec -07

📋 Highlights
  • Strong Sales & Profit Growth:: Net sales rose 4.6% to $10.6B, operating profit up 31.5% to $425.9M, EPS increased 43.8% to $1.28.
  • Gross Margin Expansion:: 107 bps margin expansion to 29.9% driven by lower shrink and inventory markups, despite 79 bps LIFO headwind.
  • Inventory & Cash Flow Efficiency:: Inventory reduced 6.5% YoY, $2.8B cash flow from operations YTD, supporting $516M in dividends.
  • Expansion Plans:: 4,885 real estate projects in 2025 (575 US new stores), 4,730 in 2026, with 80% stores in small towns forming a competitive moat.
  • Digital Growth:: 17,000+ stores with DoorDash/Uber Eats delivery, 75% of orders <1 hour, and DG Media Network driving double-digit retail media volume growth.

Operational Highlights

The company generated $2.8 billion in cash flow from operations year-to-date and reduced inventory by 6.5% compared to the prior year. Dollar General plans to execute approximately 4,885 real estate projects in 2025, including 575 new store openings in the US and 15 in Mexico. For 2026, the company plans to execute around 4,730 real estate projects, including 450 new store openings in the US and 10 in Mexico. The company's digital initiative, including its mobile app and website, has been popular with customers, and its delivery capabilities have expanded through partnerships with DoorDash and Uber Eats.

Gross Margin Expansion

The company delivered 107 basis points of gross margin expansion in Q3, despite a 79 basis point headwind from LIFO. The team expects another quarter of gross margin expansion in Q4, driven by continued improvement in shrink, growth in private label and non-consumables, and supply chain efficiencies. As the CFO mentioned, the company feels good about its long-term gross margin opportunities, with confidence in delivering on its long-term model.

Valuation Metrics

With a P/E Ratio of 22.81 and an EV/EBITDA of 15.2, the market is pricing in a certain level of growth. The company's ROE of 16.31% and ROIC of 5.62% indicate a strong ability to generate returns. The current valuation metrics suggest that the market is expecting continued growth and profitability from Dollar General.

Growth Prospects

The company is confident in its long-term financial framework and is focused on delivering profitable sales growth, high returns on invested capital, and long-term shareholder value. With 11,000 opportunities to put a Dollar General store in the Continental United States, the company feels bullish about getting a lot of these. Analysts estimate next year's revenue growth at 4.9%, indicating a continued upward trajectory.

Competitive Advantage

Dollar General's rural landscape and rent provide a competitive moat, making it difficult for competitors to replicate. The company believes it can compete effectively against Amazon and Walmart Plus, with a strong value proposition in rural America. With a unique offering in rural areas, the company's digital capabilities enable delivery to customers within an hour.

3. NewsRoom

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Allianz Asset Management GmbH Boosts Stock Position in Dollar General Corporation $DG

Feb -04

Source: defenseworld.net

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Dollar General Corporation Announces Updates to its Board of Directors

Feb -03

Source: businesswire.com

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Dollar General Bets on Remodels as Its Next Growth Engine

Feb -03

Source: zacks.com

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New York State Common Retirement Fund Has $13.29 Million Holdings in Dollar General Corporation $DG

Feb -03

Source: defenseworld.net

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State of Wyoming Has $754,000 Stock Position in Dollar General Corporation $DG

Feb -03

Source: defenseworld.net

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Market Today: Palantir beats, Disney warns; oil slides

Feb -02

Source: gurufocus.com

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Here are the retailers with the most store openings and closures planned for 2026

Feb -02

Source: cnbc.com

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Best Growth Stocks to Buy for February 2nd

Feb -02

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Retail - Variety Stores

Expected Growth: 4.0%

Dollar General's 4.0% growth in Retail - Variety Stores is driven by strategic store expansions, efficient supply chain management, and a focus on affordable, quality products. The company's ability to cater to price-sensitive customers in rural and suburban areas, coupled with its robust e-commerce platform, has contributed to its steady growth and market share gains.

7. Detailed Products

Food and Beverages

Dollar General offers a range of food and beverages, including fresh produce, meat, dairy products, canned goods, and packaged snacks.

Household Essentials

This segment includes products such as cleaning supplies, paper products, and personal care items like toiletries and cosmetics.

Apparel and Footwear

Dollar General sells a range of clothing and footwear for men, women, and children, including casual wear, workwear, and accessories.

Home Decor and Furniture

This segment includes a variety of home decor items, such as wall art, rugs, and decorative accessories, as well as furniture like tables, chairs, and shelving units.

Personal Care and Beauty

Dollar General offers a range of personal care and beauty products, including skincare, haircare, and cosmetics.

Baby and Kids' Products

This segment includes products for babies and kids, such as diapers, formula, toys, and children's clothing.

Pet Food and Supplies

Dollar General sells a range of pet food and supplies, including dog food, cat food, and pet accessories.

Electronics and Media

This segment includes electronics like TVs, phones, and gaming consoles, as well as media products like DVDs and video games.

8. Dollar General Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Dollar General operates in the discount store industry, offering a wide range of products at affordable prices. The threat of substitutes is relatively low as the company's target market is primarily low-income households and individuals who prioritize affordability. While online shopping and other retail formats exist, they may not offer the same level of convenience and value that Dollar General provides.

Bargaining Power Of Customers

Dollar General's customers are primarily low-income households and individuals who are price-sensitive and have limited bargaining power. The company has a large customer base and operates in a highly competitive market, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Dollar General sources products from a variety of suppliers, including large retailers, manufacturers, and distributors. While the company has a large volume of purchases, suppliers may have some bargaining power due to the concentration of suppliers in the industry. However, Dollar General's scale and market position allow it to negotiate favorable terms with suppliers.

Threat Of New Entrants

The threat of new entrants is moderate as the discount store industry has relatively low barriers to entry. However, establishing a strong brand and competing with established players like Dollar General requires significant investment and marketing efforts. New entrants may also face challenges in matching Dollar General's scale and operational efficiency.

Intensity Of Rivalry

The discount store industry is highly competitive, with several established players like Dollar Tree, Family Dollar, and Walmart. Dollar General faces intense competition for customers, which drives pricing pressure, marketing expenses, and promotional activities. The company must continually invest in improving its operations, product offerings, and customer experience to maintain market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 70.20%
Debt Cost 4.33%
Equity Weight 29.80%
Equity Cost 5.95%
WACC 4.81%
Leverage 235.56%

11. Quality Control: Dollar General Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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General Mills

A-Score: 6.6/10

Value: 5.7

Growth: 4.1

Quality: 5.8

Yield: 8.0

Momentum: 6.0

Volatility: 9.7

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Target

A-Score: 5.4/10

Value: 6.5

Growth: 5.1

Quality: 4.5

Yield: 7.0

Momentum: 2.0

Volatility: 7.0

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Walmart

A-Score: 5.4/10

Value: 2.5

Growth: 5.4

Quality: 5.3

Yield: 2.0

Momentum: 7.5

Volatility: 9.3

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Dollar General

A-Score: 5.3/10

Value: 4.5

Growth: 5.6

Quality: 3.9

Yield: 3.0

Momentum: 9.5

Volatility: 5.7

1-Year Total Return ->

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Costco Wholesale

A-Score: 5.2/10

Value: 2.0

Growth: 6.8

Quality: 5.7

Yield: 2.0

Momentum: 5.0

Volatility: 10.0

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Dollar Tree

A-Score: 4.2/10

Value: 4.8

Growth: 3.2

Quality: 2.8

Yield: 0.0

Momentum: 9.0

Volatility: 5.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

149.25$

Current Price

149.25$

Potential

-0.00%

Expected Cash-Flows