Asset structure analysis
The fiscal year 2023 ends February 2, 2024.
Dollar General’s total assets were $30.8 billion and $29.1 billion as of February 2, 2024 and February 3, 2023, respectively.
Net property and equipment was $6.09 billion at February 2, 2024, accounting for 19.8% of total assets.
Operating lease assets were $11.1 billion as of February 2, 2024, constituting 36% of total assets.
Goodwill was $4.34 billion as of February 2, 2024, consisting of 14.1% of total assets.
Other intangible assets, net was $1.2 billion as of February 2, 2024, making up 3.9% of total assets.
Total current assets were $8 billion as of February 2, 2024, comprising 26% of total assets.
Among total current assets, merchandises inventories were $7 billion as of February 2, 2024, accounting for 22.7% of total assets.
Cash and cash equivalents were $537 million as of February 2, 2024, constituting 1.7% of total assets.
Liquidity and solvency analysis
Total current liabilities were $6.7 billion as of February 2, 2024.
The current ratio was 1.19 times for fiscal 2023.
Total liabilities were $24.05 billion as of February 2, 2024.
The debt ratio was 78% for fiscal 2023.
Profitability analysis
Dollar General’s net sales were $38.7 billion, $37.8 billion and $34.2 billion for the year ended February 2, 2024, for the year ended February 3, 2023 and for the year ended January 28, 2022, respectively.
Net sales in fiscal 2023 were up 2.4% year-on-year.
Net sales in fiscal 2022 were up 10.5% year-on-year.
Gross profit was $11.7 billion, $11.8 billion and $10.8 in fiscal 2023, 2022 and 2021, respectively.
Gross profit margin was 30.2%, 31.2% and 31.6% in fiscal 2023, 2022 and 2021, respectively.
Net income was $1.66 billion, $2.42 billion and $2.4 billion in fiscal 2023, 2022 and 2021, respectively.
Net profit margin was 4.3%, 6.4% and 7% in fiscal 2023, 2022 and 2021, respectively.
Total shareholders’ equity was $6.75 billion and $5.54 billion as of February 2, 2024 and February 3, 2023, respectively.
The return on equity was 24.6% and 43.7% for fiscal 2023 and 2022, respectively.
Cash flow analysis
Net cash provided by operating activities was $2.4 billion, $2 billion and $2.87 billion in fiscal 2023, 2022 and 2021, respectively.
Purchases of property and equipment were $1.7 billion, $1.56 billion and $1.07 billion for fiscal 2023, 2022 and 2021, respectively.
Dollar General’s free cash flow was $0.7 billion, $0.44 billion and $1.8 billion in fiscal 2023, 2022 and 2021, respectively.
Repurchases of common stock were $0, $2.75 billion and $2.55 billion in fiscal 2023, 2022 and 2021, respectively.
Payments of cash dividends were $518 million, $493.7 million and $392 million in fiscal 2023, 2022 and 2021, respectively.
In fiscal 2022 and 2021, the size of repurchases is very big, and more than the amount of free cash flow.
We think that this situation would worsen the balance sheet with adding debt; and the situation is unsustainable.
Conclusion
Dollar General stock price is $137.15 per share, which is equivalent to $30.23 billion in market capitalization.
We reckon that the reasonable valuation is about $15 billion.
Disclaimer: The content is for reference only and does not constitute investment advice.
Introduction
We are the largest discount retailer in the United States by number of stores, with 20,022 stores located in 48 U.S. states and Mexico as of March 1, 2024, with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States. Our first stores in Mexico opened in 2023. We offer a broad selection of merchandise, including consumable items, seasonal items, home products and apparel. Our merchandise includes national brands from leading manufacturers, as well as our own private brand selections with prices at substantial discounts to national brands. We offer our customers these national brand and private brand products at everyday low prices (typically $10 or less) in our convenient small-box locations.
