01—Abstract
Summary
Summary of the 10-K filed March 22, 2012. Cited figures are marked; the original filing is the authoritative source.
Dollar General Corporation's 2011 10-K filing highlights a year of solid performance, marked by a 13.6%a increase in total sales driven by a 6.0% same-store sales growth.
The company demonstrated operational efficiency, with operating profit increasing by 17.0%b and a 61 basis point reduction in SG&A expenses as a percentage of sales. This growth was achieved despite inflationary pressures on product costs and increased diesel fuel expenses. The company continued its store expansion strategy, opening 625 new stores and remodeling or relocating 575 existing ones, including the expansion of its Dollar General Market concept.
Financial health was further strengthened by a reduction in long-term obligations by $670 millionc and a $500 million share repurchase program authorization. For investors, Dollar General's consistent same-store sales growth indicates a resilient business model, less susceptible to economic downturns due to its focus on value-conscious consumers and essential merchandise. The company's strategic priorities—driving sales, increasing gross margins, reducing costs through process improvements and IT, and fostering a culture of service—are clearly articulated and reflected in its financial results.
The expansion into new markets and store formats, alongside effective cost management and a focus on private brands, positions the company for continued growth. Investors should note the company's ongoing commitment to share repurchases and debt reduction as key capital allocation strategies.
02—Key points
Key Highlights
- Total sales increased by 13.6% to $14.81 billion in fiscal year 2011.
- Same-store sales grew by 6.0%, indicating continued customer traffic and transaction value increases.
- Operating profit rose by 17.0% to $1.49 billion, with operating profit as a percentage of sales improving to 10.1%.
- Successfully reduced selling, general, and administrative (SG&A) expenses as a percentage of sales by 61 basis points.
- Opened 625 new stores and remodeled/relocated 575 stores, expanding its retail footprint and improving store productivity.
- Reduced total long-term obligations by $670 million, ending the year with $2.62 billion in debt.
- Authorized a $500 million share repurchase program, demonstrating a commitment to returning capital to shareholders.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Dollar General Corp kept $0.05.
- Revenue$14.81B100.0%
- Cost of revenue−$10.11B68.3%
- Gross profit$4.70B31.7%
- Operating costs−$3.21B21.7%
- Operating income$1.49B10.1%
- Interest, other & tax−$724.1M4.9%
- Net income$766.7M5.2%
Where FY2012 revenue went
$14.81B- Cost of revenue: $10.11B, 68% of revenue
- SG&A: $3.21B, 22% of revenue
- Net income: $766.7M, 5.2% of revenue
- Interest, other & tax: $724.1M, 4.9% of revenue
Kept 5.2% as net incomeNet income $766.7M · 5.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed March 22, 2012Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $14.81B$13.04B | +13.6% |
| Cost of Revenue | $10.11B$8.86B | +14.1% |
| Gross Profit | $4.70B$4.18B | +12.5% |
| SG&A Expenses | $3.21B$2.90B | +10.5% |
| Operating Income | $1.49B$1.27B | +17.0% |
| Interest Expense | $204.90M$273.99M | −25.2% |
| Net Income | $766.68M$627.86M | +22.1% |
| EPS (Basic) | $2.25$1.84 | +22.3% |
| EPS (Diluted) | $2.22$1.82 | +22.0% |
| Shares Outstanding (Basic) | 341.23M341.05M | +0.1% |
| Shares Outstanding (Diluted) | 345.12M344.80M | +0.1% |
05—Questions
Frequently Asked Questions
What was Dollar General's financial performance in fiscal year 2011?
In fiscal year 2011, Dollar General reported a 13.6% increase in total sales, reaching $14.81 billion. This was driven by a 6.0% same-store sales growth, reflecting increased customer traffic and average transaction amounts. Operating profit grew by 17.0% to $1.49 billion, and SG&A expenses as a percentage of sales decreased by 61 basis points, showcasing improved operational efficiency.
How is Dollar General expanding its store base and operations?
Dollar General is actively expanding its store base by opening new stores and remodeling/relocating existing ones. In fiscal year 2011, they opened 625 new stores and remodeled or relocated 575. The company is also growing its 'Dollar General Market' concept, which offers an expanded food selection, and is testing larger traditional store formats.
What is Dollar General's strategy for managing costs and improving profitability?
Dollar General focuses on several strategies to manage costs and improve profitability. These include driving productive sales growth through category management and improved in-stock levels, increasing gross profit through private brand expansion and sourcing efficiencies, leveraging process improvements and information technology to reduce costs (such as implementing workforce management systems), and maintaining everyday low prices. They also focus on reducing inventory shrinkage and optimizing their supply chain.
What is the company's approach to capital allocation, specifically regarding debt and share repurchases?
Dollar General has demonstrated a commitment to strengthening its financial position and returning value to shareholders. During fiscal year 2011, they reduced long-term obligations by $670 million, partly through the redemption of Senior Notes. The company also authorized a $500 million share repurchase program and repurchased approximately $185 million worth of its common stock from a principal shareholder. They plan to continue debt reduction and share repurchases.
06—Continue