Dollar General Corporation


SKU: DG Category:


This is our first report on major discount retailer, Dollar General Corporation. The company delivered a mixed performance with a decent top-line performance but an earnings miss. Its revenue growth was led by comp sales growth and in market share of both consumable and non-consumable product sales. Dollar General, during the quarter, experienced significantly higher cost pressures. This includes challenges within the company’s supply chain, higher inventory shrink and damages, sales mix pressures, and everything that impacted gross margin. In spite of the challenges, the company delivered a double-digit rise in the diluted earnings per share and robust same-store sales growth. The management has recently cut its annual profit forecast after the company missed estimates for the quarterly earnings. However, it has remained committed to presenting products at a $1 price point, and the comp sales performance for these products was pretty strong. Moreover, the overall mix of products shipped by the company has significantly evolved with the development of the company’s non-consumable initiatives in pOpshelf. Product cost inflation was higher than anticipated, which resulted in the LIFO provision of around $148 million in the quarter. The capital allocation priorities in the quarter continue to serve quite well, remaining unchanged. We initiate coverage on the stock of Dollar General Corporation with a ‘Hold’ rating.

Our Report Structure:

⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
⦁ Disclosures

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