01—Abstract
Summary
Summary of the 10-K filed March 22, 2016. Cited figures are marked; the original filing is the authoritative source.
Dollar General Corporation's 2016 10-K filing reveals a company focused on consistent growth and operational efficiency.
The retailer, a significant player in the discount consumer goods market, emphasizes its value and convenience proposition as key drivers of its success. With a strategy centered on profitable sales growth, capturing new opportunities, maintaining a low-cost structure, and investing in its workforce, Dollar General demonstrated resilience and expansion during the fiscal year ended January 29, 2016. Financially, the company reported an increase in net sales and operating profit, supported by a solid same-store sales growth.
Strategic initiatives, such as improving in-stock levels, expanding private brands, and optimizing its supply chain, contributed to its performance. The company continued its expansion by opening new stores and remodeling existing ones, while also focusing on enhancing shareholder value through share repurchases and dividend payments. Despite facing a competitive retail landscape and economic uncertainties that affect its core customer base, Dollar General appears well-positioned due to its strong business model and strategic execution.
02—Key points
Key Highlights
- Dollar General operated 12,575 stores across 43 states as of February 26, 2016, with a strong presence in rural, suburban, and urban communities.
- The company achieved its 26th consecutive year of same-store sales growth in fiscal year 2015, indicating a resilient business model.
- Consumables represented the largest merchandise category at 75.9% of net sales in fiscal year 2015, followed by Seasonal (12.4%), Home products (6.3%), and Apparel (5.4%).
- Net sales increased by 7.7% to $20.37 billion in fiscal year 2015 compared to the prior year.
- Operating profit increased by 9.7% to $1.94 billion, and net income rose by 9.4% to $1.17 billion in fiscal year 2015.
- The company returned capital to shareholders through $1.3 billion in share repurchases and $0.88 per share in dividends paid in fiscal year 2015.
- Dollar General plans to continue its growth strategy, with plans to open 900 new stores and remodel or relocate 875 stores in fiscal year 2016.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, Dollar General Corp kept $0.06.
- Revenue$20.37B100.0%
- Cost of revenue−$14.06B69.0%
- Gross profit$6.31B31.0%
- Operating costs−$4.37B21.4%
- Operating income$1.94B9.5%
- Interest, other & tax−$775.2M3.8%
- Net income$1.17B5.7%
Where FY2016 revenue went
$20.37B- Cost of revenue: $14.06B, 69% of revenue
- SG&A: $4.37B, 21% of revenue
- Net income: $1.17B, 5.7% of revenue
- Interest, other & tax: $775.2M, 3.8% of revenue
Kept 5.7% as net incomeNet income $1.17B · 5.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed March 22, 2016Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $20.37B$18.91B | +7.7% |
| Cost of Revenue | $14.06B$13.11B | +7.3% |
| Gross Profit | $6.31B$5.80B | +8.7% |
| SG&A Expenses | $4.37B$4.03B | +8.2% |
| Operating Income | $1.94B$1.77B | +9.7% |
| Interest Expense | $86.94M$88.23M | −1.5% |
| Net Income | $1.17B$1.07B | +9.4% |
| EPS (Basic) | $3.96$3.50 | +13.1% |
| EPS (Diluted) | $3.95$3.49 | +13.2% |
| Shares Outstanding (Basic) | 294.33M304.63M | −3.4% |
| Shares Outstanding (Diluted) | 295.21M305.68M | −3.4% |
05—Questions
Frequently Asked Questions
What is Dollar General's primary business strategy?
Dollar General's strategy is centered on providing a broad base of customers with their basic everyday and household needs, supplemented by a variety of general merchandise items, at everyday low prices in conveniently located, small-box stores. Their operating priorities include driving profitable sales growth, capturing growth opportunities, enhancing their position as a low-cost operator, and investing in their people.
How did Dollar General perform financially in the fiscal year ended January 29, 2016?
In the fiscal year ended January 29, 2016, Dollar General reported a 7.7% increase in net sales to $20.37 billion. Operating profit grew by 9.7% to $1.94 billion, and net income increased by 9.4% to $1.17 billion. This performance was driven by a 2.8% increase in same-store sales and the addition of new stores.
What are the main risks facing Dollar General, as identified in the filing?
Key risks include adverse economic conditions impacting customer disposable income, intense competition, potential disruptions to the supply chain, inventory shrinkage, product liability and food safety concerns, cybersecurity threats, reliance on key personnel, and the impact of governmental regulations. The company also notes risks associated with its private brands and potential failure to achieve successful implementation of strategic initiatives.
How is Dollar General returning capital to shareholders?
Dollar General returned capital to shareholders through share repurchases and dividends. In fiscal year 2015, the company repurchased approximately 17.6 million shares of its common stock for $1.3 billion and paid cash dividends totaling $0.88 per share.
06—Continue