10-KPeriod: FY2016

DOLLAR GENERAL CORP Annual Report, Year Ended Jan 29, 2016

Filed March 22, 2016For Securities:DG

Summary

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.

Financial Highlights

47 data points
Beta

Revenue

$20.37B

31.0% Gross Margin

Net Income

$1.17B

5.7% Net Margin

EPS (Diluted)

$3.95

Total Assets

$11.26B

Cash & Equivalents

$157.95M

Free Cash Flow

$1.39B

Financial Statements
Beta
Revenue$20.37B
Cost of Revenue$14.06B
Gross Profit$6.31B
SG&A Expenses$4.37B
Operating Income$1.94B
Interest Expense$86.94M
Net Income$1.17B
EPS (Basic)$3.96
EPS (Diluted)$3.95
Shares Outstanding (Basic)294.33M
Shares Outstanding (Diluted)295.21M

Key Highlights

  • 1Dollar General operated 12,575 stores across 43 states as of February 26, 2016, with a strong presence in rural, suburban, and urban communities.
  • 2The company achieved its 26th consecutive year of same-store sales growth in fiscal year 2015, indicating a resilient business model.
  • 3Consumables 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%).
  • 4Net sales increased by 7.7% to $20.37 billion in fiscal year 2015 compared to the prior year.
  • 5Operating profit increased by 9.7% to $1.94 billion, and net income rose by 9.4% to $1.17 billion in fiscal year 2015.
  • 6The company returned capital to shareholders through $1.3 billion in share repurchases and $0.88 per share in dividends paid in fiscal year 2015.
  • 7Dollar General plans to continue its growth strategy, with plans to open 900 new stores and remodel or relocate 875 stores in fiscal year 2016.

Frequently Asked Questions

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.

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.

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.

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.