01—Abstract
Summary
Summary of the 10-K filed March 31, 2010. Cited figures are marked; the original filing is the authoritative source.
Dollar General Corporation's 2010 10-K filing reveals a company in strong growth and operational improvement, exiting fiscal year 2009 with significant increases in sales and profitability.
The company emphasizes its value and convenience proposition, which has resonated with customers, leading to a 20th consecutive year of same-store sales growth. Key financial highlights include a 12.8%a increase in total sales, driven by a robust 9.5% same-store sales growth, and a significant improvement in gross profit margins. The company has also successfully managed its cost structure, leading to a decrease in SG&A as a percentage of sales, even with IPO-related expenses.
Operationally, Dollar General is focused on expanding its store base, planning to open 600 new stores in fiscal year 2010, in addition to remodeling and relocating existing ones. The company's strategic priorities include driving productive sales growth, increasing gross margins through category management and sourcing efficiencies, leveraging technology for cost reduction, and strengthening its corporate culture. Despite substantial debt, the company has made progress in deleveraging, using proceeds from its recent IPO to redeem a significant portion of its long-term obligations.
02—Key points
Key Highlights
- 20th consecutive year of same-store sales growth, indicating a resilient business model.
- Total sales increased by 12.8% in fiscal year 2009, with same-store sales growing by 9.5%.
- Gross profit margin improved by 201 basis points to 31.3% in fiscal year 2009 due to increased markups, volume efficiencies, and shrink reduction.
- SG&A expenses as a percentage of sales decreased by 21 basis points to 23.2%, despite significant IPO-related costs.
- Plans to open approximately 600 new stores in fiscal year 2010, continuing aggressive expansion.
- Successfully used IPO proceeds to reduce long-term debt by $400.9 million.
- Net income increased to $339.4 million in fiscal year 2009, up from $108.2 million in fiscal year 2008.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Dollar General Corp kept $0.03.
- Revenue$11.80B100.0%
- Cost of revenue−$8.11B68.7%
- Gross profit$3.69B31.3%
- Operating costs−$2.74B23.2%
- Operating income$953.3M8.1%
- Interest, other & tax−$613.8M5.2%
- Net income$339.4M2.9%
Where FY2010 revenue went
$11.80B- Cost of revenue: $8.11B, 69% of revenue
- SG&A: $2.74B, 23% of revenue
- Net income: $339.4M, 2.9% of revenue
- Interest, other & tax: $613.8M, 5.2% of revenue
Kept 2.9% as net incomeNet income $339.4M · 2.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed March 31, 2010Financial Statements
| Revenue | $11.80B |
| Cost of Revenue | $8.11B |
| Gross Profit | $3.69B |
| SG&A Expenses | $2.74B |
| Operating Income | $953.26M |
| Interest Expense | $345.74M |
| Net Income | $339.44M |
| EPS (Basic) | $1.05 |
| EPS (Diluted) | $1.04 |
| Shares Outstanding (Basic) | 322.78M |
| Shares Outstanding (Diluted) | 324.84M |
05—Questions
Frequently Asked Questions
What is Dollar General's primary business strategy?
Dollar General's strategy is to provide a broad selection of everyday necessities and general merchandise at everyday low prices (typically $10 or less) in convenient, small-box locations. They focus on a strong value and convenience proposition to attract and retain their value-conscious customer base.
How did the company perform financially in the fiscal year ended January 29, 2010?
The company reported strong financial performance, with total sales increasing by 12.8% to $11.8 billion. Same-store sales grew by 9.5%. Net income rose significantly to $339.4 million from $108.2 million in the prior year, driven by improved gross margins and effective cost management.
What are the company's main growth drivers and future plans?
Dollar General's growth is driven by increasing store sales, expanding operating profit rates, and growing its store base. They plan to open approximately 600 new stores in fiscal year 2010 and are focused on improving store productivity, expanding private brands, and optimizing sourcing for margin enhancement.
What is the company's debt situation, and how has it been managed?
Dollar General has substantial debt. However, following its initial public offering in November 2009, the company used approximately $400.9 million of the net proceeds to redeem a portion of its Senior Notes and Senior Subordinated Notes. They also made a voluntary prepayment of $325 million on their senior secured term loan facility in January 2010, demonstrating a commitment to deleveraging.
06—Continue