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1. Company Snapshot

1.a. Company Description

Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, Midwestern, and eastern United States.It offers consumable products, including paper and cleaning products, such as paper towels, bath tissues, paper dinnerware, trash and storage bags, disinfectants, and laundry products; packaged food comprising cereals, pasta, canned soups, fruits and vegetables, condiments, spices, sugar, and flour; and perishables that include milk, eggs, bread, refrigerated and frozen food, beer, and wine.The company's consumable products also comprise snacks, such as candies, cookies, crackers, salty snacks, and carbonated beverages; health and beauty products, including over-the-counter medicines and personal care products, such as soaps, body washes, shampoos, cosmetics, and dental hygiene and foot care products; pet supplies and pet food; and tobacco products.


In addition, it offers seasonal products comprising holiday items, toys, batteries, small electronics, greeting cards, stationery, prepaid phones and accessories, gardening supplies, hardware, and automotive and home office supplies; and home products that include kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, and bed and bath soft goods.Further, the company provides apparel, which comprise casual everyday apparel for infants, toddlers, girls, boys, women, and men, as well as socks, underwear, disposable diapers, shoes, and accessories.As of February 25, 2022, it operated 18,190 stores in 47 states in the United States.


The company was formerly known as J.L. Turner & Son, Inc.and changed its name to Dollar General Corporation in 1968.Dollar General Corporation was founded in 1939 and is based in Goodlettsville, Tennessee.

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1.b. Last Insights on DG

Dollar General's recent performance was negatively impacted by a weak 2026 outlook, which overshadowed stronger-than-expected fourth-quarter results. The company's guidance for fiscal 2026 came in below Wall Street expectations, sparking investor concerns. Despite a notable EPS upside and 6% revenue jump in Q4, the stock faced selling pressure. Additionally, institutional investors, such as Capital International Investors, reduced their positions in the company, selling 79.1% of their shares during the third quarter. This move may have contributed to the stock's decline.

1.c. Company Highlights

2. Dollar General Surges Ahead: Q4 2025 Outperforms and 2026 Outlook Strong

Dollar General delivered a standout Q4, with net sales climbing 5.9% to $10.9 billion and same‑store sales up 4.3%. Gross margin improved to 30.4% (up 105 bps), while SG&A fell to 24.9% (down 165 bps). Operating profit surged 106% to $606 million and EPS rose 122% to $1.93—well above the $1.66 estimate, per CFO Donny Lau. Cash flow from operations hit $3.6 billion, a 21.3% increase. Current valuation sits at a 17.43 P/E and 12.6 EV/EBITDA, reflecting the market’s confidence in the firm’s growth trajectory.

Publication Date: 07:28

📋 Highlights
  • Q4 Net Sales Growth: Net sales rose 5.9% to $10.9 billion, with same-store sales up 4.3%.
  • Operating Profit Surge: Operating profit jumped 106% to $606 million, EPS increased 122% to $1.93.
  • Cash Flow Strength: Generated $3.6 billion in 2025 cash flow from operations, up 21.3% YoY.
  • Media Network Growth: DG Media Network revenue reached $170 million in 2025, expected to drive further margin gains.
  • Store Remodel Impact: Project Renovate/Elevate remodels delivered 6% and 3% annualized comp sales lifts, respectively.

Robust Same‑Store Sales and Market Share Gains

The 4.3% lift in same‑store sales underscores Dollar General’s strong value proposition, especially in consumable and non‑consumable categories. The company captured additional market share in both dollars and units, benefiting from its nearly 21,000 stores within a 5‑mile radius of 75% of the U.S. population. This geographic density continues to drive foot traffic and repeat visits.

Digital and Delivery Accelerate Growth

Digital initiatives have accelerated, with the DG app now boasting over 7 million monthly active users and 100 million marketable profiles. Delivery services achieved an 80 % one‑hour fulfillment rate, contributing 80 basis points to comp sales in Q4. The DG Media Network, a $170 million retail‑media platform, adds a high‑margin revenue stream and enhances the omnichannel customer experience.

Margin Outlook and Cost Discipline

Management expects modest gross‑margin improvement in 2026, offset by a modest SG&A deleverage that will keep margin growth steady. The company’s focus on inventory simplification—reducing 1,500 SKUs—and supply‑chain efficiencies are projected to lift operating margins toward the 6%‑7% target over the next three to four years, reinforcing profitability resilience.

Capital Allocation and Shareholder Value

Dollar General maintains a fortress balance sheet, having redeemed $1.7 billion of senior notes in 2025. Capital spending is capped at $1.4‑$1.5 billion, aligning with high‑return projects. The firm plans to restart its share‑repurchase program in 2027, boosting ROE and shareholder returns while preserving flexibility for future growth initiatives.

Strategic Growth Pillars for 2026

The company’s 2026 roadmap centers on four pillars: enhancing the customer experience with new store formats, elevating the brand through remodels, driving enterprise‑wide efficiencies via AI and inventory optimization, and expanding reach with 450 new U.S. stores and international ventures. These initiatives are designed to sustain the 3.7%‑4.2% net‑sales growth forecast and reinforce Dollar General’s leadership in the discount‑retail space.

3. NewsRoom

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Beauty for Every Budget: DG Announces 7 Days of Savings Event

Apr -09

Source: businesswire.com

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9,376 Shares in Dollar General Corporation $DG Purchased by Park Capital Management LLC WI

Apr -06

Source: defenseworld.net

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Don't Put All Your REIT Eggs In One Basket

Apr -05

Source: seekingalpha.com

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Brookstone Capital Management Buys Shares of 8,985 Dollar General Corporation $DG

Apr -04

Source: defenseworld.net

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Allspring Global Investments Holdings LLC Buys 209,167 Shares of Dollar General Corporation $DG

Apr -03

Source: defenseworld.net

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Retail Sales Were Up 0.6% In February, But Ripple Effects from the Iran War Could Reverse That Trend. Here Are 2 Consumer Staples Stocks That Can Withstand Them.

Apr -02

Source: fool.com

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Target This Discount Retail Stock Next Month

Mar -31

Source: schaeffersresearch.com

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How Project Elevate Is Driving 3% Comp Lifts for Dollar General Stores

Mar -30

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Retail - Variety Stores

Expected Growth: 4.0%

Dollar General's 4.0% growth in Retail - Variety Stores is driven by strategic store expansions, efficient supply chain management, and a focus on affordable, quality products. The company's ability to cater to price-sensitive customers in rural and suburban areas, coupled with its robust e-commerce platform, has contributed to its steady growth and market share gains.

7. Detailed Products

Food and Beverages

Dollar General offers a range of food and beverages, including fresh produce, meat, dairy products, canned goods, and packaged snacks.

Household Essentials

This segment includes products such as cleaning supplies, paper products, and personal care items like toiletries and cosmetics.

Apparel and Footwear

Dollar General sells a range of clothing and footwear for men, women, and children, including casual wear, workwear, and accessories.

Home Decor and Furniture

This segment includes a variety of home decor items, such as wall art, rugs, and decorative accessories, as well as furniture like tables, chairs, and shelving units.

Personal Care and Beauty

Dollar General offers a range of personal care and beauty products, including skincare, haircare, and cosmetics.

Baby and Kids' Products

This segment includes products for babies and kids, such as diapers, formula, toys, and children's clothing.

Pet Food and Supplies

Dollar General sells a range of pet food and supplies, including dog food, cat food, and pet accessories.

Electronics and Media

This segment includes electronics like TVs, phones, and gaming consoles, as well as media products like DVDs and video games.

8. Dollar General Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Dollar General operates in the discount store industry, offering a wide range of products at affordable prices. The threat of substitutes is relatively low as the company's target market is primarily low-income households and individuals who prioritize affordability. While online shopping and other retail formats exist, they may not offer the same level of convenience and value that Dollar General provides.

Bargaining Power Of Customers

Dollar General's customers are primarily low-income households and individuals who are price-sensitive and have limited bargaining power. The company has a large customer base and operates in a highly competitive market, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Dollar General sources products from a variety of suppliers, including large retailers, manufacturers, and distributors. While the company has a large volume of purchases, suppliers may have some bargaining power due to the concentration of suppliers in the industry. However, Dollar General's scale and market position allow it to negotiate favorable terms with suppliers.

Threat Of New Entrants

The threat of new entrants is moderate as the discount store industry has relatively low barriers to entry. However, establishing a strong brand and competing with established players like Dollar General requires significant investment and marketing efforts. New entrants may also face challenges in matching Dollar General's scale and operational efficiency.

Intensity Of Rivalry

The discount store industry is highly competitive, with several established players like Dollar Tree, Family Dollar, and Walmart. Dollar General faces intense competition for customers, which drives pricing pressure, marketing expenses, and promotional activities. The company must continually invest in improving its operations, product offerings, and customer experience to maintain market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 70.20%
Debt Cost 4.33%
Equity Weight 29.80%
Equity Cost 5.95%
WACC 4.81%
Leverage 235.56%

11. Quality Control: Dollar General Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
General Mills

A-Score: 6.6/10

Value: 5.7

Growth: 4.1

Quality: 5.8

Yield: 8.0

Momentum: 6.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Target

A-Score: 5.4/10

Value: 6.5

Growth: 5.1

Quality: 4.5

Yield: 7.0

Momentum: 2.0

Volatility: 7.0

1-Year Total Return ->

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Walmart

A-Score: 5.4/10

Value: 2.5

Growth: 5.4

Quality: 5.3

Yield: 2.0

Momentum: 7.5

Volatility: 9.3

1-Year Total Return ->

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Dollar General

A-Score: 5.3/10

Value: 4.5

Growth: 5.6

Quality: 3.9

Yield: 3.0

Momentum: 9.5

Volatility: 5.7

1-Year Total Return ->

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Costco Wholesale

A-Score: 5.2/10

Value: 2.0

Growth: 6.8

Quality: 5.7

Yield: 2.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Dollar Tree

A-Score: 4.2/10

Value: 4.8

Growth: 3.2

Quality: 2.8

Yield: 0.0

Momentum: 9.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

115.73$

Current Price

115.73$

Potential

-0.00%

Expected Cash-Flows