01—Abstract
Summary
Summary of the 10-K filed March 19, 2021. Cited figures are marked; the original filing is the authoritative source.
Dollar General Corporation's 10-K filing for the fiscal year ending January 29, 2021, reveals a company that navigated the COVID-19 pandemic with remarkable resilience, reporting significant increases in net sales and net income.
The company experienced a substantial surge in demand, particularly for consumable products, leading to a 21.6% increase in net sales to $33.7 billiona. This growth was driven by a 16.3% increase in same-store sales, largely due to higher average transaction amounts as customers consolidated shopping trips. Despite increased operating expenses related to the pandemic, such as employee bonuses and safety measures, these were more than offset by the higher sales volume, resulting in a 55% increase in net income to $2.66 billion.
The company's strategic initiatives, including the "DG Fresh" rollout and expansion of its non-consumables assortment, appear to be contributing positively, although the company acknowledges potential ongoing challenges with sales mix shifting back towards consumables. Dollar General also continued its aggressive share repurchase program and dividend payments, signaling confidence in its financial health and commitment to returning capital to shareholders. The outlook for the upcoming year suggests continued store growth through new openings and remodels, demonstrating a focus on long-term expansion alongside operational efficiencies.
02—Key points
Key Highlights
- Reported a 21.6% increase in net sales to $33.7 billion for fiscal year 2020.
- Achieved a 16.3% same-store sales growth, driven by increased average transaction amounts.
- Net income surged by 55% to $2.66 billion, demonstrating strong profitability.
- Invested heavily in store growth, opening 1,000 new stores and remodeling 1,780 stores in fiscal year 2020.
- Returned significant capital to shareholders through $2.5 billion in share repurchases and $355.9 million in dividends.
- The company highlighted strategic initiatives like 'DG Fresh' and the expansion of non-consumable offerings.
- Management expressed cautious optimism for the upcoming year, anticipating continued growth despite potential shifts in consumer demand patterns.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Dollar General Corp kept $0.08.
- Revenue$33.75B100.0%
- Cost of revenue−$23.03B68.2%
- Gross profit$10.72B31.8%
- Operating costs−$7.16B21.2%
- Operating income$3.55B10.5%
- Interest, other & tax−$899.7M2.7%
- Net income$2.66B7.9%
Where FY2021 revenue went
$33.75B- Cost of revenue: $23.03B, 68% of revenue
- SG&A: $7.16B, 21% of revenue
- Net income: $2.66B, 7.9% of revenue
- Interest, other & tax: $899.7M, 2.7% of revenue
Kept 7.9% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed March 19, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $33.75B$27.75B | +21.6% |
| Cost of Revenue | $23.03B$19.26B | +19.5% |
| Gross Profit | $10.72B$8.49B | +26.3% |
| SG&A Expenses | $7.16B$6.19B | +15.8% |
| Operating Income | $3.55B$2.30B | +54.4% |
| Interest Expense | $150.38M$100.57M | +49.5% |
| Net Income | $2.66B$1.71B | +55.0% |
| EPS (Basic) | $10.70$6.68 | +60.2% |
| EPS (Diluted) | $10.62$6.64 | +59.9% |
| Shares Outstanding (Basic) | 248.17M256.55M | −3.3% |
| Shares Outstanding (Diluted) | 250.08M258.05M | −3.1% |
05—Questions
Frequently Asked Questions
How did the COVID-19 pandemic impact Dollar General's financial performance in fiscal year 2020?
Dollar General experienced a significant increase in demand, particularly for consumable products, starting in March 2020. This led to a substantial rise in net sales and net income. While the company incurred incremental expenses for employee bonuses and safety measures, these were more than offset by the increased sales, resulting in a strong financial performance for the year.
What is Dollar General's strategy for future growth?
Dollar General plans to continue its store growth strategy by opening approximately 1,050 new stores and remodeling approximately 1,750 stores in fiscal year 2021. The company is also focusing on strategic initiatives like the 'DG Fresh' program for cold chain distribution, expanding its non-consumables assortment, and introducing new store formats to enhance customer offerings and capture growth opportunities.
How is Dollar General returning capital to shareholders?
Dollar General returned capital to shareholders through share repurchases and dividend payments. In fiscal year 2020, the company repurchased approximately $2.5 billion of its common stock and paid $355.9 million in cash dividends. The company's board also authorized a $2 billion increase to its share repurchase program, indicating continued commitment to shareholder returns.
What are the main categories of merchandise sold by Dollar General?
Dollar General's merchandise is categorized into four main segments: Consumables (making up the largest portion at 76.8% of sales in 2020), Seasonal products (12.1%), Home products (6.5%), and Apparel (4.6%). Consumables generally have lower gross profit margins, while seasonal and home products typically yield higher margins.
06—Continue