Company Research | Dollar General

March 22, 2024by

Today we will talk about Dollar General, which published its financial report last week.

Dollar General published its last report on March 14. Manufacturing costs make up 70% of the revenue structure and gross revenue is 30%. Over the past quarter, the company made a profit of $401M. And its market capitalization is now $56B.

Dollar General is a discount retailer of basic necessities in the United States. The company has more than 19K stores, most of which sell products for less than $10.

Dollar General operates in the Consumer Staples Distribution & Retail Industry. It was founded in 1939. In 2009, it was listed on the NYSE, and in 2012 it was included in the S&P 500 index. For the past 2 years, the company has been led by Todd Vasos and a team of experienced managers.

The main competitors of Dollar General are Walmart, Target and Dollar Tree. As you can see from the table above, some of them are ahead of Dollar General in terms of capitalization, but the company has a number of competitive advantages.

The strengths of Dollar General are based on a unique market positioning strategy. The company decided to focus on compact offline stores in sparsely populated areas of the United States. The cost of opening each store is low – about $300K, which makes the scaling process low-cost. The average annual growth in new store openings over the past 8 years is +6.8% or 949 stores annually, and the company plans to operate 27K stores by 2034. Dollar General also conducts regular share buybacks, with $14B allocated over the past 10 years.

Over the past three months, Dollar General shares have risen by +16.5%. At the same time, the consumer sector, to which the company belongs, also grew by +5.7%, and the S&P 500 index by +8.3%. As you can see, Dollar General shares show better returns than the sector average.
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