Dollar General Corporation (DG) Bundle
A Brief History of Dollar General Corporation
Dollar General Corporation, a leading discount retailer in the United States, has undergone significant transformations and growth since its inception. Founded in 1939 by J.L. Turner and his son, Dollar General began as a family-owned business in Kentucky, focusing on providing affordable goods to consumers. Over the decades, the company has evolved into a major player in the retail sector, operating thousands of stores across the country.
Financial Performance as of 2024
As of August 2, 2024, Dollar General reported a net income of $374.2 million, or $1.70 per diluted share, compared to $468.8 million or $2.13 per diluted share in 2023, reflecting a decrease of 20.2% year-over-year.
The company's net sales increased by 4.2% to $10.21 billion, driven primarily by new store openings and a 0.5% increase in same-store sales. The average sales per square foot for all stores over the 52-week period ended August 2, 2024, were $263.
| Financial Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Net Income | $374.2 million | $468.8 million | -20.2% |
| Diluted Earnings Per Share | $1.70 | $2.13 | -20.2% |
| Net Sales | $10.21 billion | $9.80 billion | +4.2% |
| Average Sales Per Square Foot | $263 | N/A | N/A |
Operational Highlights
In the first half of 2024, Dollar General opened 410 new stores and remodeled or relocated 987 stores. The company's inventory turnover rate was 3.9 times on a rolling four-quarter basis, with inventories per store decreasing by 11.0% compared to the previous year.
For the 26 weeks ended August 2, 2024, Dollar General's gross profit was 30.0% of net sales, a decrease from 31.1% in 2023, primarily due to increased markdowns and a higher proportion of sales coming from consumables. Selling, General & Administrative (SG&A) expenses were 24.6% of net sales, up from 24.0% in 2023.
Debt and Liquidity Position
As of August 2, 2024, Dollar General had total current and long-term obligations of approximately $7 billion, with significant senior notes maturing between 2024 and 2052. The company maintained a strong liquidity position, with cash generated from operating activities amounting to $1.653 billion, an increase of 127.4% from the previous year.
The effective income tax rate for the 2024 period was 22.3%, down from 22.9% in 2023, reflecting various rate-impacting items.
| Debt Obligation | Amount | Maturity Date |
|---|---|---|
| 4.250% Senior Notes | $749.9 million | September 20, 2024 |
| 4.150% Senior Notes | $499.9 million | November 1, 2025 |
| 3.875% Senior Notes | $599.9 million | April 15, 2027 |
| Total Debt | $7.004 billion | N/A |
A Who Owns Dollar General Corporation (DG)
Ownership Structure
As of 2024, Dollar General Corporation (DG) is primarily owned by a mix of institutional and individual investors. The company's total shares outstanding are approximately 219.9 million. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder Type | Number of Shares (millions) | Ownership Percentage (%) |
|---|---|---|
| Institutional Investors | 156.3 | 71.1 |
| Insider Ownership | 12.0 | 5.5 |
| Retail Investors | 51.6 | 23.4 |
Top Institutional Shareholders
The following table lists the top institutional shareholders of Dollar General Corporation as of 2024:
| Institution | Shares Held (millions) | Ownership Percentage (%) |
|---|---|---|
| The Vanguard Group | 30.2 | 13.8 |
| BlackRock, Inc. | 28.7 | 13.1 |
| State Street Corporation | 22.5 | 10.2 |
| FMR LLC (Fidelity) | 15.1 | 6.9 |
| T. Rowe Price Associates | 12.3 | 5.6 |
Insider Ownership
As of 2024, the insider ownership of Dollar General Corporation, including executives and board members, is approximately 5.5%. The following table summarizes the key insiders and their ownership:
| Name | Position | Shares Owned (millions) |
|---|---|---|
| Jeff Owen | CEO | 1.2 |
| John Garratt | CFO | 0.8 |
| Members of the Board | Various | 1.0 |
Market Performance and Stock Trends
As of August 2, 2024, Dollar General's stock price is approximately $170.54, reflecting a year-to-date increase of about 8.5%. The market capitalization of Dollar General is approximately $37.5 billion. The following table highlights key financial metrics:
| Metric | Value |
|---|---|
| Market Capitalization ($ billion) | 37.5 |
| Year-to-Date Stock Price Change (%) | 8.5 |
| 2024 Q2 Net Income ($ million) | 374.2 |
| 2024 Q2 Earnings Per Share (EPS) ($) | 1.70 |
| Dividend Paid per Share ($) | 1.18 |
Recent Developments and Future Outlook
Dollar General continues to expand its footprint, with plans to open approximately 730 new stores in 2024, including locations in Mexico. The company is focused on enhancing shareholder value through dividends and strategic growth initiatives. The effective income tax rate for the second quarter of 2024 was 22.3%, a slight decrease from the previous year. The company aims to maintain its competitive edge in the discount retail sector while navigating economic challenges.
Dollar General Corporation (DG) Mission Statement
Current Mission Statement
The mission of Dollar General Corporation is to serve others by providing convenient access to affordable products, enhancing the quality of life in the communities they serve. The company aims to deliver a superior shopping experience through a well-curated selection of merchandise at everyday low prices. Dollar General is committed to operating with integrity and supporting the communities in which they operate.
Financial Performance Overview
As of the second quarter ending August 2, 2024, Dollar General reported the following financial metrics:
| Financial Metric | Q2 2024 | Q2 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $10.21 billion | $9.80 billion | 4.2% |
| Gross Profit | $3.06 billion | $3.04 billion | 0.5% |
| Operating Profit | $550.0 million | $692.3 million | (20.6%) |
| Net Income | $374.2 million | $468.8 million | (20.2%) |
| Diluted Earnings per Share | $1.70 | $2.13 | (20.2%) |
| Cash Generated from Operations | $1.65 billion | $726.7 million | 127.4% |
| Dividends Paid | $259.5 million | $258.9 million | 0.2% |
| Inventory Turnover | 3.9 times | N/A | N/A |
Operating Strategy and Key Performance Indicators
Dollar General focuses on driving profitable sales growth through various strategic initiatives, including:
- Increasing customer traffic and average transaction amounts.
- Enhancing supply chain efficiencies through the “DG Fresh” initiative.
- Expanding store formats to better serve diverse markets.
Same-Store Sales Performance
The same-store sales increased by 0.5% in the second quarter of 2024, driven primarily by a 1.0% increase in customer traffic. However, the average transaction amount decreased by 0.5%, impacting overall sales performance.
Market Presence
As of August 2, 2024, Dollar General operated:
- 19,201 same stores contributing to $19.3 billion in sales.
- Opened 213 new stores in the second quarter of 2024.
- Plans to open approximately 730 new stores throughout fiscal 2024.
Challenges and Outlook
Despite strong operational metrics, Dollar General faces challenges such as:
- Increased inventory shrink and markdowns impacting gross margins.
- Rising labor and occupancy costs due to market pressures.
- Shifts in consumer purchasing behavior affecting product categories.
Looking ahead, Dollar General remains focused on maintaining its position as a low-cost operator while enhancing its product offering and customer experience.
Conclusion
Dollar General's mission and operational strategies reflect its commitment to affordability and community service, while its financial performance demonstrates resilience amidst market challenges.
How Dollar General Corporation (DG) Works
Business Model
Dollar General Corporation (DG) operates a chain of discount retail stores in the United States, focusing on providing low-cost products across various categories. The company primarily sells consumables, seasonal items, home products, and apparel.
Financial Performance in 2024
As of August 2, 2024, Dollar General reported net sales of $10.21 billion for the second quarter, reflecting a 4.2% increase compared to $9.80 billion in the same period of 2023. The year-to-date sales reached $20.12 billion, up from $19.14 billion in 2023.
| Financial Metric | Q2 2024 | Q2 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $10.21 billion | $9.80 billion | 4.2% |
| Gross Profit | $3.06 billion | $3.04 billion | 0.5% |
| Gross Profit Margin | 30.0% | 31.1% | -1.1% |
| SG&A Expenses | $2.51 billion | $2.35 billion | 6.7% |
| Operating Profit | $550 million | $692 million | -20.6% |
| Net Income | $374.2 million | $468.8 million | -20.2% |
| Diluted EPS | $1.70 | $2.13 | -20.2% |
Sales by Category
For the second quarter of 2024, sales by category were as follows:
| Category | Q2 2024 Sales | Q2 2023 Sales | Change (%) |
|---|---|---|---|
| Consumables | $8.40 billion | $7.92 billion | 6.0% |
| Seasonal | $1.05 billion | $1.08 billion | -2.0% |
| Home Products | $480.2 million | $516.6 million | -7.0% |
| Apparel | $278.2 million | $281.8 million | -1.3% |
Cost Structure
The cost of goods sold (COGS) for the second quarter of 2024 was $7.15 billion, representing 70.0% of net sales. This is an increase from 68.9% in the same quarter of 2023. The gross profit margin decreased to 30.0% in 2024 from 31.1% in 2023, primarily due to increased markdowns and inventory damages.
Operating Expenses
For the second quarter of 2024, selling, general, and administrative (SG&A) expenses were $2.51 billion, accounting for 24.6% of net sales, up from 24.0% in 2023. The increase was primarily driven by higher retail labor, depreciation, and store occupancy costs.
Net Income and Earnings Per Share
Net income for the second quarter of 2024 was $374.2 million, equating to a diluted earnings per share (EPS) of $1.70. This compares to net income of $468.8 million and diluted EPS of $2.13 in the same period of 2023.
Cash Flow and Dividends
Cash generated from operating activities for the first half of 2024 was $1.65 billion, up from $726 million in 2023. Total cash dividends paid during the 2024 period amounted to $259.5 million, maintaining a dividend of $1.18 per share.
| Cash Flow Metrics | 2024 | 2023 |
|---|---|---|
| Cash Generated from Operations | $1.65 billion | $726 million |
| Dividends Paid | $259.5 million | $258.9 million |
Store Growth and Expansion
As of August 2, 2024, Dollar General operated 19,201 stores across the U.S. The company opened 410 new stores in the second quarter of 2024, and completed 987 remodels or relocations.
Inventory Management
Inventory turnover for Dollar General was 3.9 times on a rolling four-quarter basis as of August 2, 2024. The company reported a decrease in inventories by 11.0% compared to the previous year.
How Dollar General Corporation (DG) Makes Money
Revenue Streams
Dollar General Corporation primarily generates revenue through the sale of a variety of products, with a significant focus on consumables. For the 2024 fiscal year, the following sales data has been recorded:
| Category | Q2 2024 Net Sales (in millions) | Q2 2023 Net Sales (in millions) | Change (in millions) | Percentage Change |
|---|---|---|---|---|
| Consumables | $8,397.2 | $7,921.6 | $475.6 | 6.0% |
| Seasonal | $1,054.8 | $1,076.2 | ($21.4) | (2.0%) |
| Home Products | $480.2 | $516.6 | ($36.4) | (7.0%) |
| Apparel | $278.2 | $281.8 | ($3.6) | (1.3%) |
| Total Net Sales | $10,210.4 | $9,796.2 | $414.2 | 4.2% |
Cost of Goods Sold (COGS)
For the 2024 fiscal year, Dollar General reported a COGS of:
- $7,150.9 million for Q2 2024
- $6,751.5 million for Q2 2023
This represents a year-over-year increase of $399.4 million, or 5.9%.
Gross Profit Analysis
Gross profit for Dollar General in Q2 2024 was reported at:
- $3,059.5 million, a slight increase of $14.8 million, or 0.5%, compared to Q2 2023.
- Gross profit margin was 30.0% in Q2 2024, down from 31.1% in Q2 2023.
The decrease in gross profit margin was largely attributed to increased markdowns and a higher proportion of sales from the consumables category, which typically has lower margins.
Selling, General and Administrative Expenses (SG&A)
SG&A expenses for Q2 2024 totaled:
- $2,509.5 million, compared to $2,352.4 million in Q2 2023, an increase of $157.1 million or 6.7%.
- SG&A as a percentage of net sales rose to 24.6% in 2024 from 24.0% in 2023.
This increase was primarily driven by higher retail labor costs, depreciation, and store occupancy expenses.
Operating Profit
Operating profit decreased significantly in Q2 2024:
- Reported at $550.0 million, down 20.6% from $692.3 million in Q2 2023.
- Operating profit margin was 5.39% in Q2 2024 compared to 7.07% in Q2 2023.
This decline reflects the combined effects of increased costs and lower gross margins.
Net Income and Earnings Per Share
Net income for Dollar General in Q2 2024 was:
- $374.2 million, down from $468.8 million in Q2 2023, representing a decrease of 20.2%.
- Diluted earnings per share (EPS) were $1.70 in Q2 2024, down from $2.13 in Q2 2023.
Cash Flow and Financial Health
Cash generated from operating activities for the 2024 period was:
- $1.653 billion, an increase of $926.0 million or 127.4% from the comparable 2023 period.
- Cash dividends paid during the 2024 period totaled $259.5 million, maintaining a stable dividend of $1.18 per share.
Store Growth and Capital Expenditures
Dollar General continues to expand its store footprint:
- Opened 410 new stores in 2024.
- Remodeled or relocated 987 stores during the same period.
- Projected capital expenditures for 2024 are between $1.3 billion and $1.4 billion.
Summary of Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Sales | $10,210.4 million | $9,796.2 million | $414.2 million |
| Gross Profit | $3,059.5 million | $3,044.7 million | $14.8 million |
| Operating Profit | $550.0 million | $692.3 million | ($142.4 million) |
| Net Income | $374.2 million | $468.8 million | ($94.6 million) |
| Diluted EPS | $1.70 | $2.13 | ($0.43) |
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