NYSE:DG
DOLLAR GENERAL CORP
A value-oriented general merchandise retailer focusing on affordable daily necessities for small-town America with over 17,000 stores.
Key Metrics
Investment Thesis
Bull Case
Dollar General offers exposure to essential consumer demand with a massive moat in rural markets that larger competitors struggle to serve efficiently. The company's ability to generate $3.00B in operating cash flow provides flexibility for dividends and strategic acquisitions, supporting shareholder value despite recent earnings volatility.
Bear Case
Profitability has deteriorated sharply with net income falling from $2.42B to $1.13B over the last two years, raising concerns about sustainable margins under inflationary pressure. The balance sheet carries significant debt and lease liabilities relative to equity, limiting financial flexibility if consumer spending slows or supply chain costs spike further.
About DOLLAR GENERAL CORP
Dollar General Corporation operates as a general merchandise retailer primarily serving rural and suburban communities across the United States. The company offers a curated selection of everyday essentials including food, health and personal care products, home goods, and seasonal items through its extensive store network.
Analysis
Management Discussion
While revenue reached a peak of $40.61B in 2025, net profit declined to $1.13B compared to $2.42B in 2023, indicating significant margin pressure despite top-line growth. The company's operating cash flow remains robust at $3.00B, but heavy capital outflows of $1.31B for investing and $1.29B for financing activities suggest substantial reinvestment or debt repayment needs.
Industry Overview
The U.S. discount retail sector is highly competitive with consolidation trends favoring operators who can achieve scale while maintaining low price points for essential goods. Success in this industry relies heavily on operational efficiency, private label development, and the ability to capture value from inflationary headwinds without sacrificing volume.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $37.84B | $38.69B | $40.61B |
| Cost of Revenue | $26.02B | $26.97B | $28.59B |
| Gross Profit | $11.82B | $11.72B | $12.02B |
| Operating Expenses | $8.49B | $9.27B | $10.30B |
| Operating Income | $3.33B | $2.45B | $1.71B |
| G&A | $8.49B | $9.27B | $10.30B |
| Stock-Based Comp | $72.7M | $51.9M | $58.7M |
| D&A | $724.9M | $848.8M | $971.7M |
| Depreciation | $717.8M | $839.9M | $963.8M |
| Other OpEx | $0 | $0 | $0 |
| Non-Operating Income | $-211.7M | $-326.8M | $-274.3M |
| Interest Expense | $211.3M | $326.8M | — |
| Pre-Tax Income | $3.12B | $2.12B | $1.44B |
| Income Tax | $700.6M | $458.2M | $314.5M |
| Continuing Ops | $2.42B | $1.66B | $1.13B |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $2.42B | $1.66B | $1.13B |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $2.42B | $1.66B | $1.13B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $7.58B | $8.01B | $8.16B |
| Cash & Equivalents | $381.6M | $537.3M | $932.6M |
| Inventory | $6.76B | $6.99B | $6.71B |
| Prepaid Expenses | $302.9M | $366.9M | $393.0M |
| Other Current Assets | $135.8M | $112.3M | $127.1M |
| Long-Term Assets | $21.50B | $22.78B | $22.97B |
| PP&E (Net) | $5.24B | $6.09B | $6.21B |
| Intangibles | $1.20B | $1.20B | $1.20B |
| Goodwill | $4.34B | $4.34B | $4.34B |
| Operating Leases | $10.67B | $11.10B | $11.16B |
| Other LT Assets | $57.7M | $60.6M | $57.3M |
| Total Assets | $29.08B | $30.80B | $31.13B |
| Current Liabilities | $5.89B | $6.73B | $6.87B |
| Accounts Payable | $3.55B | $3.59B | $3.83B |
| Current Leases | $1.29B | $1.39B | $1.46B |
| Taxes Payable | $8.9M | $10.7M | $10.1M |
| Other Current Liab | $0 | $768.6M | $519.5M |
| Long-Term Liabilities | $17.65B | $17.32B | $16.85B |
| LT Operating Leases | $9.36B | $9.70B | $9.76B |
| Other LT Liab | $8.29B | $7.62B | $7.09B |
| Total Liabilities | $23.54B | $24.05B | $23.72B |
| Shareholders' Equity | $5.54B | $6.75B | $7.41B |
| Retained Earnings | $1.66B | $2.80B | $3.41B |
| AOCI | $43.0K | $493.0K | $3.0M |
| Total L&E | $29.08B | $30.80B | $31.13B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $2.42B | $1.66B | $1.13B |
| Non-Cash Adjustments | $-1.68B | $425.3M | $1.66B |
| Working Capital Changes | $1.24B | $305.2M | $214.4M |
| Cash from Operations | $1.98B | $2.39B | $3.00B |
| Cash from Investing | $-1.56B | $-1.69B | $-1.31B |
| Share Buybacks | $2.75B | — | — |
| Dividends Paid | $493.7M | $518.0M | $519.0M |
| Cash from Financing | $-392.5M | $-542.1M | $-1.29B |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $36.7M | $155.7M | $395.3M |
| Beginning Cash | $344.8M | $381.6M | $537.3M |
| Ending Cash | $381.6M | $537.3M | $932.6M |
Frequently Asked Questions
How does DOLLAR GENERAL CORP make money?
Core retail operations generating $40.61B in revenue comprising food, health, home goods, and seasonal categories; Supply chain and logistics network managing inventory of $6.71B; Real estate and leasehold interests involving significant operating lease liabilities totaling nearly $10B.
What are the main risks for DG?
Sensitivity to rising commodity and fuel costs impacting the $28.59B cost of revenue margin compression; Potential erosion of market share as competitors like Dollar Tree expand or Walmart strengthens its discount presence; Operational leverage risks given high fixed costs including $10.30B in operating expenses and depreciation of $963.8M.
What is DG's competitive advantage?
Unmatched density of store locations in rural and low-income markets providing accessibility to customers in underserved areas; Highly efficient supply chain and private label brand portfolio driving gross profit margins; Strong same-store sales growth driven by inflationary pricing power and essential product mix.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.