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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

Breaking News: Dollar General Corporation reported strong third-quarter earnings, exceeding expectations and raising full-year guidance. Net sales increased 4.6% to $10.6 billion, with same-store sales up 2.5%. Operating profit rose 31.5% to $425.9 million, and diluted EPS increased 43.8% to $1.28. The company's board declared a quarterly cash dividend of $0.32. Year-to-date cash flows from operations increased 28.4% to $2.8 billion. Some analysts are optimistic about the stock, with a recommendation to buy, citing the company's strong performance across all categories and increased customer traffic.

1.c. Company Highlights

2. Dollar General's Q2 Earnings: Strong Performance and Raised Guidance

Dollar General reported a strong second-quarter 2025 earnings, with net sales increasing 5.1% to $10.7 billion, driven by new stores and a 2.8% same-store sales growth. Gross profit margin expanded by 137 basis points, driven by lower shrink, higher inventory markups, and lower inventory damages. Operating profit rose 8.3% to $595 million, and EPS grew 9.4% to $1.86, beating estimates of $1.56. The company's financial performance was highlighted by its ability to maintain everyday low prices, with over 2,000 SKUs at or below $1.

Publication Date: Aug -29

📋 Highlights
  • Net Sales Growth:: Increased 5.1% to $10.7 billion, driven by 204 new store openings and 2.8% same-store sales growth from balanced traffic and basket gains.
  • Gross Margin Expansion:: Improved 137 basis points due to reduced shrink (-80+ bps improvement), lower inventory damages, and higher markups.
  • Non-Consumables Momentum:: Achieved 2.5% comp growth in discretionary categories, with sustained momentum in home, apparel, and PopShelf stores.
  • Digital & Delivery Success:: DoorDash sales surged 60% YoY, with 75%+ orders delivered within one hour, alongside 592 Project Renovate remodels.
  • Financial Returns:: Generated $1.8 billion in cash flow (H1), raised 2025 guidance to $5.08–$6.30 EPS, and expects 6–7% operating margin by 2025.

Operational Highlights

The company continued to invest in its digital initiative, including its mobile app, website, and delivery options, which are driving incrementality and sales growth. Dollar General opened 204 new stores in Q2 and completed 729 Project Elevate remodels and 592 Project Renovate remodels, enhancing its store portfolio. As Todd Vasos noted, "We're proud of our work in fresh categories, which has been accelerating for 12-13 years," highlighting the company's efforts to expand its fresh offerings and improve its competitive position.

Financial Outlook

The company raised its financial outlook for 2025, expecting net sales growth of 4.3% to 4.8%, same-store sales growth of 2.1% to 2.6%, and EPS in the range of $5.08 to $6.30. The guidance assumes an effective tax rate of approximately 23.5% and does not include share repurchases under the company's share repurchase program. With a P/E Ratio of 20.06 and an ROE of 15.64%, the company's valuation metrics suggest a premium for its growth prospects.

Valuation and Growth Prospects

Analysts estimate next year's revenue growth at 4.5%. With a Dividend Yield of 2.17% and a Free Cash Flow Yield of 7.75%, the company's shares offer an attractive income proposition. The company's ROIC of 5.25% and Net Debt/EBITDA of 6.21 indicate a manageable debt burden and a focus on returns. As the company continues to execute on its growth initiatives, its valuation multiples will be tested, with a P/S Ratio of 0.57 and an EV/EBITDA of 15.6.

3. NewsRoom

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Dollar General Corp (DG) Q3 2025 Earnings Call Highlights: Strong Sales Growth and Strategic Expansions

Dec -04

Source: gurufocus.com

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S&P 500 Gains and Losses Today: Dollar General Soars on Strong Earnings; Intel Stock Slumps

Dec -04

Source: investopedia.com

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Why Dollar General Stock Popped Today

Dec -04

Source: fool.com

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Dollar General's CEO sees potential in 11,000 locations left empty as rivals like pharmacies shutter stores

Dec -04

Source: businessinsider.com

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Dollar General's Stock is Jumping. Many Of Its Shoppers Are 'Stretched'

Dec -04

Source: investopedia.com

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Dow Jones Today: Major Stock Indexes Little Changed; Weekly Jobless Claims Unexpectedly Fall; Inflation Data on Tap Tomorrow

Dec -04

Source: investopedia.com

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Top Stock Movers Now: Meta, Dollar General, Kroger, and More

Dec -04

Source: investopedia.com

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CEO Says Dollar General Is in ‘Second Inning' of Digital Journey

Dec -04

Source: pymnts.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: 6.4/10

Value: 5.7

Growth: 4.1

Quality: 5.9

Yield: 8.0

Momentum: 5.5

Volatility: 9.3

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Walmart

A-Score: 5.5/10

Value: 2.4

Growth: 5.4

Quality: 4.8

Yield: 2.0

Momentum: 8.5

Volatility: 9.7

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Dollar General

A-Score: 5.4/10

Value: 5.2

Growth: 5.6

Quality: 3.9

Yield: 3.0

Momentum: 9.0

Volatility: 5.7

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Costco Wholesale

A-Score: 5.4/10

Value: 1.4

Growth: 7.0

Quality: 5.7

Yield: 2.0

Momentum: 6.0

Volatility: 10.0

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Target

A-Score: 5.0/10

Value: 6.8

Growth: 5.1

Quality: 4.7

Yield: 7.0

Momentum: 0.5

Volatility: 6.0

1-Year Total Return ->

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Dollar Tree

A-Score: 4.2/10

Value: 5.5

Growth: 3.2

Quality: 2.8

Yield: 0.0

Momentum: 8.5

Volatility: 5.0

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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

132.37$

Current Price

132.37$

Potential

-0.00%

Expected Cash-Flows