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Dollar General Corp - Stock Quote DG

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Morningstar's Dollar General Corp Stock Analysis

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Is it the right time to buy or sell?
Is it the right time to buy or sell?

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Despite Mixed First-Quarter Results, Dollar General’s Down-Market Strength Should Shine

Zain Akbari, CFA Equity Analyst

Analyst Note

| Zain Akbari, CFA |

We plan a mid-single-digit percentage uptick for our $212 per share valuation of narrow-moat Dollar General after it reported mixed first-quarter results (including roughly flat same-store sales despite a difficult comparison), with the increase reflecting the time value of money and more optimistic near-term assumptions. We had been enthusiastic about Dollar General’s prospects considering inflation and heightened economic uncertainty, and this already-rosy view is behind our more measured reaction to the news than the shares’ low-double-digit percentage trading surge. We still expect mid-single-digit percentage yearly top-line growth and high-single-digit operating margins over the next decade, on average, and suggest investors await a more attractive entry point. 

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Dollar General Corp's Company Profile

Business Description

A leading American discount retailer, Dollar General operates over 18,000 stores in 47 states, selling branded and private-label products across a wide variety of categories. In fiscal 2021, 77% of net sales came from consumables (including paper and cleaning products, packaged and perishable food, tobacco, and health and beauty items), 12% from seasonal merchandise (such as toys, greeting cards, decorations, and gardening supplies), 7% from home products (for example, kitchen supplies, small appliances, and cookware), and 4% from basic apparel. Stores average roughly 7,400 square feet, and about 75% of Dollar General locations are in towns of 20,000 or fewer people. The firm emphasizes value, with most of its items sold at everyday low prices of $5 or less.

100 Mission Ridge
Goodlettsville, TN, 37072
T +1 615 855-4000
Industry Discount Stores
Most Recent Earnings Apr 30, 2022
Fiscal Year End Jan 28, 2023
Stock Type Classic Growth
Employees 163,000

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