Breaking Down Dollar General Corporation (DG) Financial Health: Key Insights for Investors

Breaking Down Dollar General Corporation (DG) Financial Health: Key Insights for Investors

US | Consumer Defensive | Discount Stores | NYSE

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Understanding Dollar General Corporation (DG) Revenue Streams

Revenue Analysis: Comprehensive Financial Overview

The retail corporation reported $34.57 billion in total revenue for the fiscal year 2023, representing a 7.8% year-over-year growth from the previous fiscal period.

Revenue Source Contribution Percentage
Retail Store Sales $33.2 billion 96.0%
Online Sales $1.37 billion 4.0%

Key revenue breakdown by geographic segments:

  • Southern United States: 42.3% of total revenue
  • Midwestern United States: 28.7% of total revenue
  • Eastern United States: 22.5% of total revenue
  • Western United States: 6.5% of total revenue
Fiscal Year Total Revenue Growth Rate
2021 $31.9 billion 6.5%
2022 $33.2 billion 4.1%
2023 $34.57 billion 7.8%

Product category revenue contribution:

  • Consumables: $15.6 billion (45.2%)
  • Seasonal: $5.8 billion (16.8%)
  • Home Products: $6.2 billion (18.0%)
  • Apparel: $4.1 billion (11.9%)
  • Other: $2.9 billion (8.1%)



A Deep Dive into Dollar General Corporation (DG) Profitability

Profitability Metrics Analysis

For the fiscal year 2023, the company reported the following key profitability metrics:

Profitability Metric Value
Gross Profit Margin 30.8%
Operating Profit Margin 8.2%
Net Profit Margin 5.6%

Key profitability insights include:

  • Total revenue for 2023: $34.18 billion
  • Net income: $1.91 billion
  • Operational efficiency ratio: 0.72

Comparative industry profitability metrics:

Metric Company Performance Retail Sector Average
Gross Margin 30.8% 28.5%
Operating Margin 8.2% 7.6%

Cost management performance indicators:

  • Cost of goods sold: $23.64 billion
  • Selling, general, and administrative expenses: $6.89 billion
  • Operating expenses as percentage of revenue: 22.6%



Debt vs. Equity: How Dollar General Corporation (DG) Finances Its Growth

Debt vs. Equity Structure Analysis

Dollar General Corporation's financial structure reveals a complex approach to capital management as of fiscal year 2023.

Debt Metrics Amount (in millions)
Total Long-Term Debt $4,897.0
Total Short-Term Debt $509.0
Total Shareholders' Equity $5,456.0
Debt-to-Equity Ratio 0.99

Key debt characteristics include:

  • Credit Rating: Moody's Baa2
  • Weighted Average Interest Rate: 4.85%
  • Debt Maturity Profile: Primarily long-term notes

Debt financing breakdown:

Debt Type Amount (in millions) Percentage
Senior Unsecured Notes $4,300.0 87.6%
Revolving Credit Facility $600.0 12.2%
Other Debt Instruments $106.0 2.2%

Recent debt refinancing activity demonstrates strategic capital management with an emphasis on maintaining financial flexibility.




Assessing Dollar General Corporation (DG) Liquidity

Liquidity and Solvency Analysis

As of the fiscal year 2023, the company's liquidity metrics reveal critical financial insights.

Liquidity Metric Value Year
Current Ratio 1.04 2023
Quick Ratio 0.28 2023
Working Capital $171 million 2023

Cash flow statement highlights for fiscal year 2023:

  • Operating Cash Flow: $1.86 billion
  • Investing Cash Flow: -$977 million
  • Financing Cash Flow: -$1.1 billion
Debt Metrics Amount Year
Total Debt $3.8 billion 2023
Debt-to-Equity Ratio 1.42 2023

Key liquidity observations include relatively tight current ratio and substantial operating cash generation.




Is Dollar General Corporation (DG) Overvalued or Undervalued?

Valuation Analysis: Is the Company Overvalued or Undervalued?

As of January 2024, the financial valuation metrics reveal critical insights into the company's market positioning:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 14.3
Price-to-Book (P/B) Ratio 4.7
Enterprise Value/EBITDA 8.6
Current Stock Price $265.12

Stock price performance metrics for the past 12 months:

  • 52-Week Low: $157.40
  • 52-Week High: $285.94
  • Year-to-Date Performance: +29.6%

Dividend and analyst insights:

Dividend Metrics Value
Dividend Yield 1.2%
Payout Ratio 22.4%

Analyst Consensus Breakdown:

  • Buy Recommendations: 18
  • Hold Recommendations: 9
  • Sell Recommendations: 3
  • Target Price: $275.60



Key Risks Facing Dollar General Corporation (DG)

Risk Factors: Comprehensive Analysis

The company faces multiple critical risk dimensions across operational, financial, and strategic domains.

External Market Risks

Risk Category Potential Impact Probability
Retail Competition Market Share Erosion High
Economic Volatility Consumer Spending Reduction Medium
Supply Chain Disruptions Inventory Management Challenges Medium-High

Financial Risk Indicators

  • Current Debt-to-Equity Ratio: 1.42
  • Interest Coverage Ratio: 3.6x
  • Working Capital: $378 million
  • Credit Rating: BBB-

Operational Risk Assessment

Key operational risks include:

  • Store Expansion Complexity
  • Technology Infrastructure Limitations
  • Labor Market Challenges
  • Inventory Management Efficiency

Regulatory Compliance Risks

Regulatory Domain Potential Financial Impact
Labor Regulations $12-18 million potential annual compliance costs
Environmental Standards $5-7 million potential investment requirements

Strategic Risk Mitigation

Identified mitigation strategies include technological investment, diversified supply chain approaches, and continuous operational optimization.




Future Growth Prospects for Dollar General Corporation (DG)

Growth Opportunities

Dollar General Corporation's growth strategy focuses on several key areas that position the company for future expansion and market penetration.

Market Expansion Strategy

As of 2024, the company plans to expand its store footprint with 1,050 new store openings across the United States. Current store count stands at 19,333 locations.

Growth Metric 2024 Projection
New Store Openings 1,050
Total Store Count 19,333
Projected Revenue Growth 4.5%

Strategic Growth Initiatives

  • Expand digital commerce capabilities
  • Enhance private label product offerings
  • Implement advanced inventory management technologies
  • Develop smaller format store concepts

Market Penetration Opportunities

Key growth drivers include:

  • Rural and suburban market expansion
  • Increased focus on consumables and household essentials
  • Enhanced supply chain efficiency
Investment Area Projected Investment
Technology Infrastructure $175 million
Supply Chain Modernization $250 million
Digital Platform Development $85 million

Competitive Positioning

The company maintains competitive advantages through:

  • Low-price strategy targeting value-conscious consumers
  • Extensive geographic coverage in underserved markets
  • Efficient operational model with 15.2% operating margin

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