Table of Contents :
• Stock Rating & Target Price
• Investment Thesis
• Fundamental Models Used
• Company Description
• Corporate Timeline
• Key Metrics (KPI ) and Recently Reported Earnings Review
• Business Highlights, Strategic Announcements & Outlook
• Quarter-over-Quarter (Q-o-Q) and Year-over-Year (Y-o-Y) Growth Analysis
• Key Catalysts Driving Growth
• Historical Financial Statement Analysis & CAGR Trends
• Quarterly Key Financial Ratios and Performance Metrics
• Annual Financial Performance Analysis: Horizontal and Vertical Financial Analysis, Trends
• Financial Forecasts
• Annual Forecasts: Income Statement
• Annual Forecasts: Cash Flow Statements
• Net Debt Levels
• A Closer Look at DCF: Our Assumptions and Methodology
• Terminal Value Calculation
• Target Price Analysis
• Valuation Multiples
• Supplementary Valuation Analysis: Multiples Approach
• Scenario/Sensitivity Analysis – Base Case , Bull Case ,Bear Case
• Holistic Peer Review & Trading Comps: Financial Data, Operational Metrics, and Valuation Multiples
• Implied Price Per Share
• Ownership Activity/ Insider Trades
• Ownership Summary
• An analysis of ESG Risk Rating
• Key Professionals
• Key Board Members
• Key Risks Considerations
• Analyst Ratings
• Analyst Industry Views
• Disclosures
Dollar General’s Deep Discount Dilemma—Is it Ready to Turn Things Around?
Dollar General’s Q4 marginally beat expectations, but 2025 EPS guidance of $5.10-$5.80—well below prior forecasts—reinforces near-term headwinds from economic uncertainty, low-income consumer pressures, and competitive pricing. Same-store sales grew 1.2%, driven by modest consumables strength, while discretionary categories remained weak. Gross margin declined 8 bps to 29.4%, with shrink improvement (+68 bps) offset by markdowns and distribution costs. However, SG&A deleverage (-294 bps) weighed more significantly, driven by labor cost inflation and normalized incentive accruals. Management’s turnaround playbook centers on store rationalization (147 closures, including 51 pOpshelf), inventory optimization (-6.9% per store), and operational streamlining via Project Elevate and Project Renovate, targeting 4,250 remodels with expected comp lifts of 3%-8%. Digital expansion is another key lever, with same-day delivery scaling to 10,000 stores by year-end, driving higher average ticket sizes. DG Media Network also presents a long-term margin opportunity (+150 bps potential uplift). Despite persistent margin headwinds (adjusted op margin 5.1%), management’s long-term 6.0%-6.5% target appears achievable by 2028, hinging on shrink mitigation, discretionary mix recovery, and private brand expansion. With shares trading at 14.3x forward earnings—well below the five-year average of 19x—the valuation looks compelling. Can Dollar General sustain this margin recovery trajectory, or will cost pressures and competitive intensity cap upside potential?
