10-KPeriod: FY2020

DOLLAR GENERAL CORP Annual Report, Year Ended Jan 31, 2020

Filed March 19, 2020For Securities:DG

Summary

Dollar General Corporation (DG) filed its 10-K for the fiscal year ended January 31, 2020, presenting a stable performance characterized by continued store growth and a focus on its value and convenience proposition. The company operates as a leading discount retailer with a significant store footprint across the United States, primarily serving value-conscious customers. The report highlights consistent same-store sales growth for 30 consecutive years prior to this filing, underscoring the resilience of its business model. Financially, Dollar General demonstrated solid top-line growth with an 8.3% increase in net sales year-over-year, driven by both new store openings and positive same-store sales growth. Profitability also saw an improvement, with operating profit up 8.8% and diluted earnings per share increasing to $6.64. The company continued to invest in its growth strategy through new store openings and remodels, and also returned capital to shareholders via dividends and share repurchases, signaling confidence in its ongoing operational and financial health. The company also acknowledged the emerging COVID-19 outbreak as a potential factor, though it did not anticipate a material impact on its financial results for the upcoming fiscal year at the time of filing.

Financial Highlights

47 data points
Beta

Revenue

$27.75B

30.6% Gross Margin

Net Income

$1.71B

6.2% Net Margin

EPS (Diluted)

$6.64

Total Assets

$22.83B

Cash & Equivalents

$240.32M

Free Cash Flow

$2.24B

Financial Statements
Beta
Revenue$27.75B
Cost of Revenue$19.26B
Gross Profit$8.49B
SG&A Expenses$6.19B
Operating Income$2.30B
Interest Expense$100.57M
Net Income$1.71B
EPS (Basic)$6.68
EPS (Diluted)$6.64
Shares Outstanding (Basic)256.55M
Shares Outstanding (Diluted)258.05M

Key Highlights

  • 1Net sales grew by 8.3% to $27.75 billion in fiscal year 2019, driven by a 3.9% increase in same-store sales and new store openings.
  • 2Diluted earnings per share increased by 11.2% to $6.64 in fiscal year 2019.
  • 3The company expanded its store base, opening 975 new stores, remodeling 1,024 stores, and relocating 100 stores in fiscal year 2019, with plans for continued expansion in fiscal year 2020.
  • 4Gross profit margin improved by 14 basis points to 30.6% in fiscal year 2019, primarily due to higher initial markups on inventory.
  • 5Operating profit increased by 8.8% to $2.30 billion in fiscal year 2019.
  • 6Dollar General continued its capital return program, repurchasing $1.2 billion of its common stock and paying $327.6 million in dividends in fiscal year 2019.
  • 7The company noted the potential impact of tariffs on imported goods and the emerging COVID-19 outbreak, stating it did not anticipate a material financial impact from these events in fiscal year 2020 at the time of filing.

Frequently Asked Questions

Dollar General's core business strategy revolves around providing value and convenience to its customers. This is achieved through everyday low prices on a focused assortment of essential and discretionary merchandise in conveniently located, small-box stores, often in rural and suburban areas. The company aims to drive profitable sales growth, capture growth opportunities through store expansion and strategic initiatives like DG Fresh, maintain its position as a low-cost operator, and invest in its employees.

In the fiscal year ended January 31, 2020, Dollar General reported strong financial performance. Net sales increased by 8.3% to $27.75 billion, supported by a 3.9% increase in same-store sales. Diluted earnings per share rose by 11.2% to $6.64. Gross profit margin saw a slight improvement, and operating profit increased by 8.8%. The company also continued to return capital to shareholders through share repurchases and dividends.

Dollar General's key growth drivers include expanding its store footprint by opening new stores and relocating or remodeling existing ones. The company also focuses on initiatives to enhance its merchandise offering, improve operational efficiency, and leverage digital tools to meet evolving customer needs. Its strong value proposition and convenient store locations are fundamental to driving customer traffic and sales growth.

Dollar General identifies several key risks, including those related to economic factors affecting its core customer base (low and fixed incomes), intense competition, potential disruptions in its supply chain (including impacts from tariffs and the COVID-19 outbreak), inventory shrinkage, failure to manage inventory effectively, cybersecurity threats, and the ability to attract and retain qualified employees. The company also notes risks associated with legal proceedings and changes in governmental regulations.