01—Abstract
Summary
Summary of the 10-K filed March 24, 2017. Cited figures are marked; the original filing is the authoritative source.
Dollar General Corporation's (DG) 2017 10-K filing highlights a period of continued growth and strategic focus on its core business model of providing value and convenience to a broad customer base.
The company operated over 13,400 stores across 44 states, emphasizing its presence in rural, suburban, and urban communities. Its business model is centered on offering everyday low prices on a focused assortment of consumables, seasonal items, home products, and apparel, catering to value-conscious consumers. The report details a 27th consecutive year of positive same-store sales growth, underscoring the resilience of its value proposition across various economic conditions.
02—Key points
Key Highlights
- Dollar General operates a large network of 13,429 stores across 44 states, focusing on providing everyday low prices and convenience.
- The company achieved its 27th consecutive year of positive same-store sales growth in fiscal year 2016, demonstrating a resilient business model.
- Consumables represent the largest merchandise category at 76.4% of sales, though seasonal and home products typically offer higher gross profit margins.
- The company opened 900 new stores and remodeled or relocated 906 stores in fiscal year 2016, indicating an aggressive expansion and improvement strategy.
- Net sales increased by 7.9% to $21.99 billion in fiscal year 2016, driven by same-store sales growth and new store openings.
- Operating profit grew by 6.3% to $2.06 billion, while net income increased by 7.4% to $1.25 billion.
- Dollar General demonstrated a strong commitment to shareholder returns through dividends and a significant share repurchase program.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, Dollar General Corp kept $0.06.
- Revenue$21.99B100.0%
- Cost of revenue−$15.20B69.2%
- Gross profit$6.78B30.8%
- Operating costs−$4.72B21.5%
- Operating income$2.06B9.4%
- Interest, other & tax−$812.3M3.7%
- Net income$1.25B5.7%
Where FY2017 revenue went
$21.99B- Cost of revenue: $15.20B, 69% of revenue
- SG&A: $4.72B, 21% of revenue
- Net income: $1.25B, 5.7% of revenue
- Interest, other & tax: $812.3M, 3.7% of revenue
Kept 5.7% as net incomeNet income $1.25B · 5.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2017filed March 24, 2017Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $21.99B$20.37B | +7.9% |
| Cost of Revenue | $15.20B$14.06B | +8.1% |
| Gross Profit | $6.78B$6.31B | +7.6% |
| SG&A Expenses | $4.72B$4.37B | +8.1% |
| Operating Income | $2.06B$1.94B | +6.3% |
| Interest Expense | $97.82M$86.94M | +12.5% |
| Net Income | $1.25B$1.17B | +7.4% |
| EPS (Basic) | $4.45$3.96 | +12.4% |
| EPS (Diluted) | $4.43$3.95 | +12.2% |
| Shares Outstanding (Basic) | 281.32M294.33M | −4.4% |
| Shares Outstanding (Diluted) | 282.26M295.21M | −4.4% |
05—Questions
Frequently Asked Questions
What is Dollar General's primary business strategy?
Dollar General's primary strategy is to provide value and convenience to its customers by offering a broad selection of everyday necessities and general merchandise at everyday low prices in conveniently located, small-box stores. They focus on driving profitable sales growth, capturing growth opportunities, maintaining a low-cost operator position, and investing in their people.
How did Dollar General perform in terms of sales and profitability in fiscal year 2016?
In fiscal year 2016, Dollar General reported a 7.9% increase in net sales to $21.99 billion. Same-store sales grew by 0.9%. Operating profit increased by 6.3% to $2.06 billion, and net income rose by 7.4% to $1.25 billion, resulting in diluted earnings per share of $4.43.
What are the key merchandise categories for Dollar General, and how do their margins differ?
Dollar General's main merchandise categories are Consumables (76.4% of sales), Seasonal (12.2%), Home products (6.2%), and Apparel (5.2%). The company notes that home products and seasonal categories typically account for the highest gross profit margins, while the consumables category generally has the lowest.
What are the company's expansion plans, and what investments are being made in its store base?
Dollar General is actively expanding its store base, planning to open approximately 1,000 new stores in fiscal year 2017 and remodel or relocate approximately 900 stores. They are also innovating store formats, including implementing the DG16 layout for new and remodeled stores and testing smaller format stores for potential growth in various areas.
06—Continue