Group 1 - Dollar General Corporation held its Q2 2025 earnings conference call on August 28, 2025, with key participants including CEO Todd Vasos and CFO Kelly Dilts [1][2][3] - The earnings release for the quarter is available on the company's investor relations website [3] Group 2 - The conference call included forward-looking statements regarding financial guidance, long-term strategies, and expectations for future performance [4]

Traffic Performance Summary - VINCI Autoroutes reported a 1.0% increase in light vehicle traffic and a 0.4% increase in heavy vehicle traffic in July 2025 compared to July 2024, despite having one fewer working day [2][4] - Year-to-date (YTD) traffic for VINCI Autoroutes increased by 2.0%, with light vehicles up by 2.2% and heavy vehicles up by 0.5%, despite two fewer working days than in 2024 [2][4] VINCI Airports Passenger Traffic - VINCI Airports experienced a 3.6% increase in passenger traffic in July 2025 compared to July 2024, with a YTD increase of 5.9% [5] - Notable increases in passenger traffic were observed in several regions, including: - Portugal (ANA): +5.2% in July, +4.9% YTD - Mexico (OMA): +7.7% in July, +10% YTD - Cambodia (Cambodia Airports): +12% in July, +18% YTD - Cabo Verde: +17% in July, +18% YTD - Conversely, the United States saw a decline of 10% in July and 3.6% YTD, while the Dominican Republic experienced a decline of 8.8% in July and 12% YTD [5] VINCI Airports Commercial Movements - VINCI Airports reported a 4.4% increase in commercial movements (ATM) in July 2025 compared to July 2024, with a YTD increase of 6.2% [7] - Significant growth in commercial movements was noted in: - Cambodia (Cambodia Airports): +15% in July, +17% YTD - Cabo Verde: +22% in both July and YTD - Mexico (OMA): +7.8% in July, +9.9% YTD - The United States showed a 2.8% increase in July, but a substantial 25% increase YTD [7]

Financial Data and Key Metrics Changes - Net sales increased by 5.1% to $10.7 billion in Q2 compared to $10.2 billion in the same quarter last year, driven by strong performance from new stores and mature store base [8] - Gross profit as a percentage of sales was 31.3%, an increase of 137 basis points, primarily due to lower shrink, higher inventory markups, and lower inventory damages [18] - Operating profit for Q2 increased by 8.3% to $595 million, with operating profit as a percentage of sales increasing by 16 basis points to 5.6% [19] - EPS for the quarter increased by 9.4% to $1.86, exceeding internal expectations [20] - Merchandise inventories decreased by 5.6% year-over-year to $6.6 billion, with a 7.4% decrease on an average per store basis [21] Business Line Data and Key Metrics Changes - Same store sales increased by 2.8%, driven by a balanced growth of 1.5% in customer traffic and 1.2% in average basket size [9] - Positive comp sales growth was observed across all categories, including consumables, seasonal, home, and apparel [9] - The $1 value merchandising set, comprising over 500 rotating SKUs, saw same store sales growth more than twice the rate of the overall company [12] Market Data and Key Metrics Changes - Market share grew in both dollars and units in highly consumable product sales, as well as in non-consumable product sales [9] - Customers across all income brackets increased spending, with notable growth from middle and higher-income customers contributing to non-consumable category performance [10] Company Strategy and Development Direction - The company is committed to delivering everyday low prices, maintaining prices within three to four percentage points of mass retailers [11] - Focus on enhancing the value and convenience proposition for customers, with a commitment to a substantial offering of items at or below the $1 price point [11] - Strategic initiatives include expanding the real estate footprint, enhancing mature store base, and leveraging digital capabilities for delivery and customer engagement [27][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for shrink reduction to contribute more than 80 basis points toward the operating margin goal of 6% to 7% [42] - The company raised its financial outlook for 2025, expecting net sales growth of approximately 4.3% to 4.8% and same store sales growth of approximately 2.1% to 2.6% [23] - Management acknowledged potential uncertainty in consumer behavior as the year progresses, particularly in Q4 [23] Other Important Information - The company plans to redeem $600 million of senior notes in Q3, ahead of their April 2027 maturity [25] - A new CFO, Donnie Lau, will join the company in October, bringing a deep understanding of the business and strategic leadership [14] Q&A Session Summary Question: Expectations on shrink contributing to long-term financial framework - Management is optimistic about outperforming shrink expectations but maintains a target of 6% to 7% operating margin [42] Question: Gross margin expectations for Q3 and execution progress - Management expects year-over-year improvement in gross margin but acknowledges tougher laps in Q4 [48] Question: Delivery partnerships and their impact - The DoorDash partnership has driven significant sales growth, with a 60% year-over-year increase, and the Uber Eats partnership is expected to expand delivery capabilities [57][60] Question: Customer behavior and value proposition - Management characterizes customers as resilient and seeking value, with a strong value proposition across all income cohorts [66] Question: Gross margin drivers and shrink recovery - Management highlighted ongoing initiatives to improve shrink and damages, with optimism for continued improvement in gross margin [72][75]

Financial Data and Key Metrics Changes - Net sales increased by 5.1% to $10.7 billion in Q2 compared to $10.2 billion in the same quarter last year, driven by strong performance from new stores and the mature store base [7] - Gross profit as a percentage of sales was 31.3%, an increase of 137 basis points, primarily due to lower shrink, higher inventory markups, and lower inventory damages [17] - Operating profit for Q2 increased by 8.3% to $595 million, with operating profit as a percentage of sales rising by 16 basis points to 5.6% [19] - EPS for the quarter increased by 9.4% to $1.86, exceeding internal expectations [20] - Merchandise inventories decreased by 5.6% year-over-year to $6.6 billion, with a 7.4% decrease on an average per store basis [20] Business Line Data and Key Metrics Changes - Same store sales increased by 2.8%, driven by a balanced growth of 1.5% in customer traffic and 1.2% in average basket size [8] - Positive comp sales growth was observed across all categories, including consumables, seasonal, home, and apparel [8][9] - The $1 value merchandising set, comprising over 500 rotating SKUs, saw same store sales growth more than twice the overall company rate [12] Market Data and Key Metrics Changes - Market share grew in both dollars and units for highly consumable product sales, as well as in non-consumable product sales [8] - Customers across all income brackets increased spending, with notable growth from middle and higher-income customers [9][10] Company Strategy and Development Direction - The company is committed to maintaining everyday low prices, operating within three to four percentage points of mass retailers [11] - Focus on enhancing the value and convenience proposition for customers, with a substantial offering of items at or below the $1 price point [11] - Continued investment in real estate, with plans for 4,885 projects in 2025, including 575 new store openings in the U.S. and up to 15 in Mexico [23] - Digital initiatives are being expanded, including partnerships with DoorDash and Uber Eats to enhance delivery options [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for shrink reduction to contribute more than 80 basis points toward the operating margin goal of 6% to 7% [17][24] - The company raised its financial outlook for 2025, expecting net sales growth of approximately 4.3% to 4.8% and same store sales growth of approximately 2.1% to 2.6% [23] - Management acknowledged potential uncertainty in consumer behavior as the year progresses, particularly in Q4 [23] Other Important Information - The company is transitioning to a new CFO, Donnie Lau, who is expected to begin in October [14] - The company is focused on improving its debt metrics to support a commitment to middle BBB ratings by S&P and Moody's [22] Q&A Session Summary Question: Expectations on operating margin due to shrink reduction - Management is optimistic about potentially outperforming shrink expectations but maintains a target of 6% to 7% for the operating margin [40][41] Question: Gross margin expectations for Q3 and execution progress - Management expects year-over-year improvement in gross margin but anticipates tougher comparisons in Q4 [46][47][49] Question: Insights on delivery partnerships and incrementality - The DoorDash partnership has driven significant sales growth, and the company is optimistic about the new Uber Eats partnership [53][54][56] Question: Customer behavior and value proposition - Management noted that customers are resilient and seeking value, with a strong value proposition across all income cohorts [63][64][66] Question: Relationship between shrink and inventory damages - Management highlighted that improvements in shrink are positively impacting damages, with expectations for continued improvement [100][101]

Financial Data and Key Metrics Changes - Net sales increased by 5.1% to $10.7 billion in Q2 compared to $10.2 billion in the same quarter last year, driven by strong performance from new stores and the mature store base [7] - Same store sales increased by 2.8%, with customer traffic growing by 1.5% and average basket size increasing by 1.2% [8] - Gross profit as a percentage of sales was 31.3%, an increase of 137 basis points, attributed to lower shrink, higher inventory markups, and lower inventory damages [17] - Operating profit for Q2 increased by 8.3% to $595 million, with operating profit margin increasing by 16 basis points to 5.6% [19] - EPS for the quarter increased by 9.4% to $1.86, exceeding internal expectations [20] Business Line Data and Key Metrics Changes - Positive comp sales were observed across all categories, including consumables, seasonal, home, and apparel [8] - The $1 value merchandising set, comprising over 500 rotating SKUs, showed same store sales growth more than twice the overall company rate [12] - Non-consumable categories experienced positive quarterly same store sales growth for the second consecutive quarter, with increases of at least 2.5% in each category [33] Market Data and Key Metrics Changes - Market share grew in both dollars and units in highly consumable product sales during the quarter [8] - Customers across all income brackets increased spending, with notable growth from middle and higher-income customers contributing to non-consumable category performance [10] Company Strategy and Development Direction - The company is focused on maintaining everyday low prices, with a commitment to keeping prices within three to four percentage points of mass retailers [11] - Strategic initiatives include expanding the real estate footprint, enhancing the mature store base, and improving digital capabilities through partnerships with DoorDash and Uber Eats [26][30] - The company plans to execute approximately 4,885 real estate projects in 2025, including 575 new store openings in the U.S. and up to 15 in Mexico [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for shrink reduction to contribute more than 80 basis points toward the operating margin goal of 6% to 7% [41] - The company raised its financial outlook for 2025, expecting net sales growth of approximately 4.3% to 4.8% and same store sales growth of approximately 2.1% to 2.6% [23] - Management acknowledged potential uncertainty in consumer behavior as the year progresses, particularly in Q4 [23] Other Important Information - The company generated cash flows from operations of $1.8 billion during the first half of the year, an increase of 9.8% compared to the prior year [21] - The company plans to redeem $600 million of senior notes in the third quarter, ahead of their April 2027 maturity [23] Q&A Session Summary Question: Expectations on shrink contributing to long-term financial framework - Management is optimistic about outperforming shrink expectations but maintains a target of 6% to 7% operating margin [41] Question: Gross margin expectations for Q3 - Management expects year-over-year improvement in gross margin but anticipates tougher comparisons in Q4 [46] Question: Insights on delivery partnerships with DoorDash and Uber - The DoorDash partnership has been successful, with a 60% year-over-year sales increase, and the Uber Eats partnership is expanding rapidly [56] Question: Customer behavior and value proposition - Management noted that customers are resilient and seeking value, with a strong value proposition across all income cohorts [64] Question: Relationship between shrink and inventory damages - Management indicated that improvements in shrink are also positively impacting inventory damages, with expectations for continued improvement [100]

Core Insights - Dollar General reported quarterly earnings of $1.86 per share, exceeding the Zacks Consensus Estimate of $1.56 per share, and showing an increase from $1.7 per share a year ago, resulting in an earnings surprise of +19.23% [1] - The company achieved revenues of $10.73 billion for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 0.47% and up from $10.21 billion year-over-year [2] - Dollar General's stock has increased approximately 46.7% since the beginning of the year, significantly outperforming the S&P 500's gain of 10.2% [3] Earnings Outlook - The future performance of Dollar General's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is $0.90 on revenues of $10.59 billion, and for the current fiscal year, it is $5.77 on revenues of $42.41 billion [7] Industry Context - The Retail - Discount Stores industry, to which Dollar General belongs, is currently ranked in the top 45% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Viewpoint - Dollar General (DG.US) unexpectedly raised its full-year sales and profit forecasts, driven by strong demand for discount essential goods amid inflation and tariff pressures [1][2] Company Performance - Dollar General's same-store sales increased by 2.8% in the second quarter of fiscal year 2026, surpassing Wall Street's expectation of 2.5% [2] - The adjusted earnings per share for the second quarter were $1.86, significantly higher than the expected $1.57 [2] - The company now expects net sales growth of 4.3% to 4.8% for fiscal year 2026, up from a previous forecast of 3.7% to 4.7% [3] Market Trends - Discount retailers are performing exceptionally well as more consumers focus on saving money, with Dollar General attracting higher-income customers seeking lower-priced products [2][4] - The overall retail sector shows optimism, with major players like Walmart also adjusting their sales forecasts upward [2] Consumer Behavior - There is a noticeable shift in consumer spending, with high-income consumers less affected by inflation and continuing to spend on non-essential items, while low-income consumers are cutting back on discretionary spending [4][5] - The demand for essential goods remains strong, with both high and low-income groups prioritizing purchases of food and daily necessities [5]

Core Viewpoint - Dollar General has raised its annual sales and profit forecasts, capitalizing on stable consumer demand across income levels amid tariff and inflation concerns in the U.S. market [1] Group 1: Company Performance - Dollar General's stock price rose approximately 6% in pre-market trading, with a year-to-date increase of nearly 47% [2] - The company reported a same-store sales growth of 2.8% year-on-year for the quarter ending August 1, surpassing the market expectation of 2.5% [3] - The adjusted earnings per share for the second quarter were $1.86, significantly higher than the market expectation of $1.57 [4] Group 2: Future Projections - Dollar General expects net sales growth to be between 4.3% and 4.8% for 2025, an increase from the previous forecast range of 3.7% to 4.7% [3] - The company anticipates annual earnings per share to reach between $5.80 and $6.30, up from the earlier target range of $5.20 to $5.80 [3] Group 3: Market Trends - Discount retailers like Dollar General tend to perform better during economic downturns as budget-conscious consumers shift to purchasing affordable essentials [2] - The trend of higher-income consumers shopping at discount stores is also observed, with Walmart attracting similar demographics [2]

[Cautionary Disclosure Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Disclosure%20Regarding%20Forward-Looking%20Statements) Outlines forward-looking statements and inherent risks that could cause actual results to differ materially [Forward-Looking Statements Overview](index=3&type=section&id=Forward-Looking%20Statements%20Overview) Identifies forward-looking statements, primarily in 'Management's Discussion and Analysis,' noting actual results may materially differ due to risks - Forward-looking statements are identified by words such as 'anticipate,' 'expect,' 'plan,' 'will,' and similar expressions, primarily found in 'Management's Discussion and Analysis' and 'Note 7. Commitments and Contingencies'[8](index=8&type=chunk) - Actual results may differ materially from expectations due to various risks, and the company does not undertake to update these statements[9](index=9&type=chunk)[15](index=15&type=chunk) [Risk Factors Affecting Forward-Looking Statements](index=3&type=section&id=Risk%20Factors%20Affecting%20Forward-Looking%20Statements) Forward-looking statements are subject to economic, operational, legal, and competitive risks that could cause actual results to vary significantly - Economic factors, including employment levels, inflation, higher fuel/energy/healthcare/housing/product costs, interest rates, consumer debt, and changes in government assistance programs, can significantly impact actual results[9](index=9&type=chunk)[12](index=12&type=chunk) - Operational risks include failure to achieve strategic initiatives (merchandising, real estate, digital), competitive pressures, inventory shrinkage and damages, supply chain disruptions, and IT system security failures[10](index=10&type=chunk)[12](index=12&type=chunk) - Legal and regulatory changes, including minimum wage increases, tax law changes, and outcomes of legal disputes, also pose significant risks[10](index=10&type=chunk)[14](index=14&type=chunk) [PART I—FINANCIAL INFORMATION](index=10&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) Presents the company's unaudited consolidated financial statements, management's discussion and analysis, and disclosures on market risk and controls [ITEM 1. FINANCIAL STATEMENTS](index=10&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS.) Presents unaudited consolidated financial statements, including balance sheets, income, comprehensive income, equity, and cash flows, with detailed notes [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased by **$520.4 million** and shareholders' equity by **$598.4 million** as of August 1, 2025, driven by cash and property Consolidated Balance Sheets (in thousands) | Metric | August 1, 2025 (in thousands) | January 31, 2025 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Cash and cash equivalents | $1,284,567 | $932,576 | $351,991 | | Merchandise inventories | $6,609,690 | $6,711,242 | $(101,552) | | Total current assets | $8,398,679 | $8,163,925 | $234,754 | | Net property and equipment | $6,398,049 | $6,209,481 | $188,568 | | Total assets | $31,653,111 | $31,132,733 | $520,378 | | Current portion of long-term obligations | $19,326 | $519,463 | $(500,137) | | Total current liabilities | $6,701,666 | $6,868,702 | $(167,036) | | Total liabilities | $23,640,980 | $23,719,026 | $(78,046) | | Total shareholders' equity | $8,012,131 | $7,413,707 | $598,424 | [Consolidated Statements of Income](index=11&type=section&id=Consolidated%20Statements%20of%20Income) Net sales increased by **5.1%** to **$10.73 billion** for 13 weeks and **5.2%** to **$21.16 billion** for 26 weeks, with corresponding net income and EPS growth Consolidated Statements of Income (in thousands, except per share) | Metric (in thousands, except per share) | 13 Weeks Ended Aug 1, 2025 | 13 Weeks Ended Aug 2, 2024 | % Change (13 Weeks) | | :-------------------------------------- | :------------------------- | :------------------------- | :------------------ | | Net sales | $10,727,737 | $10,210,361 | 5.1% | | Gross profit | $3,361,668 | $3,059,479 | 9.9% | | Operating profit | $595,428 | $549,962 | 8.3% | | Net income | $411,426 | $374,190 | 10.0% | | Diluted EPS | $1.86 | $1.70 | 9.4% | | Metric (in thousands, except per share) | 26 Weeks Ended Aug 1, 2025 | 26 Weeks Ended Aug 2, 2024 | % Change (26 Weeks) | | :-------------------------------------- | :------------------------- | :------------------------- | :------------------ | | Net sales | $21,163,716 | $20,124,382 | 5.2% | | Gross profit | $6,592,956 | $6,051,628 | 8.9% | | Operating profit | $1,171,541 | $1,096,066 | 6.9% | | Net income | $803,354 | $737,507 | 8.9% | | Diluted EPS | $3.64 | $3.35 | 8.7% | [Consolidated Statements of Comprehensive Income](index=12&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income increased by **9.8%** to **$413.0 million** for 13 weeks and **9.1%** to **$806.7 million** for 26 weeks, driven by net income and other gains Consolidated Statements of Comprehensive Income (in thousands) | Metric (in thousands) | 13 Weeks Ended Aug 1, 2025 | 13 Weeks Ended Aug 2, 2024 | % Change (13 Weeks) | | :-------------------- | :------------------------- | :------------------------- | :------------------ | | Net income | $411,426 | $374,190 | 10.0% | | Comprehensive income | $412,987 | $376,062 | 9.8% | | Metric (in thousands) | 26 Weeks Ended Aug 1, 2025 | 26 Weeks Ended Aug 2, 2024 | % Change (26 Weeks) | | :-------------------- | :------------------------- | :------------------------- | :------------------ | | Net income | $803,354 | $737,507 | 8.9% | | Comprehensive income | $806,701 | $739,299 | 9.1% | [Consolidated Statements of Shareholders' Equity](index=13&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity) Total shareholders' equity increased to **$8.01 billion** by August 1, 2025, primarily due to net income, partially offset by dividends Consolidated Statements of Shareholders' Equity (in thousands) | Metric (in thousands) | January 31, 2025 | August 1, 2025 | | :-------------------- | :--------------- | :------------- | | Total Shareholders' Equity | $7,413,707 | $8,012,131 | **Key Changes (26 Weeks Ended August 1, 2025):** * Net income: **$803,354 thousand** * Dividends paid: **$(259,731) thousand** * Share-based compensation expense: **$52,977 thousand** [Consolidated Statement of Cash Flows](index=14&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Operating cash flow increased by **$162.1 million** to **$1.81 billion**, while financing cash flow significantly increased due to debt repayments Consolidated Statement of Cash Flows (in thousands) | Metric (in thousands) | 26 Weeks Ended Aug 1, 2025 | 26 Weeks Ended Aug 2, 2024 | Change (in thousands) | | :-------------------- | :------------------------- | :------------------------- | :-------------------- | | Net cash from operating activities | $1,814,855 | $1,652,729 | $162,126 | | Net cash from investing activities | $(691,494) | $(694,158) | $2,664 | | Net cash from financing activities | $(771,370) | $(273,163) | $(498,207) | | Net increase in cash and cash equivalents | $351,991 | $685,408 | $(333,417) | | Cash and cash equivalents, end of period | $1,284,567 | $1,222,691 | $61,876 | - Repayments of long-term obligations significantly increased cash used in financing activities, totaling **$509.6 million** in the 2025 period compared to **$10.3 million** in the 2024 period[30](index=30&type=chunk)[136](index=136&type=chunk) [Notes to Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies, EPS, income taxes, leases, debt, fair value, legal matters, segment reporting, and common stock transactions [1. Basis of presentation](index=15&type=section&id=1.%20Basis%20of%20presentation) Interim financial statements follow U.S. GAAP, with LIFO calculations based on estimates and a **$74.6 million** provision for 26 weeks - Interim LIFO calculations are based on management's estimates and are subject to adjustment at year-end[36](index=36&type=chunk) LIFO Provision (in millions) | Period | LIFO Provision (in millions) | | :----- | :--------------------------- | | 13-week ended Aug 1, 2025 | $62.3 | | 13-week ended Aug 2, 2024 | $10.5 | | 26-week ended Aug 1, 2025 | $74.6 | | 26-week ended Aug 2, 2024 | $20.8 | - The company uses supply chain finance programs, with **$317.1 million** in outstanding obligations as of August 1, 2025[37](index=37&type=chunk) [2. Earnings per share](index=17&type=section&id=2.%20Earnings%20per%20share) Diluted EPS was **$1.86** for 13 weeks and **$3.64** for 26 weeks, calculated based on weighted average common shares outstanding Earnings per share | Metric | 13 Weeks Ended Aug 1, 2025 | 13 Weeks Ended Aug 2, 2024 | | :----- | :------------------------- | :------------------------- | | Basic EPS | $1.87 | $1.70 | | Diluted EPS | $1.86 | $1.70 | | Metric | 26 Weeks Ended Aug 1, 2025 | 26 Weeks Ended Aug 2, 2024 | | :----- | :------------------------- | :------------------------- | | Basic EPS | $3.65 | $3.35 | | Diluted EPS | $3.64 | $3.35 | [3. Income taxes](index=17&type=section&id=3.%20Income%20taxes) The effective income tax rate increased to **23.4%** for 26 weeks due to Pillar Two minimum tax, with U.S. cash taxes expected to decrease Effective Income Tax Rate | Period | Effective Income Tax Rate (2025) | Effective Income Tax Rate (2024) | | :----- | :------------------------------- | :------------------------------- | | 13-week ended Aug 1 | 23.5% | 22.3% | | 26-week ended Aug 1 | 23.4% | 22.8% | - The increase in the effective income tax rate is primarily due to the enactment of the Pillar Two minimum tax in a certain jurisdiction[49](index=49&type=chunk) - The One Big Beautiful Bill Act (OBBBA) is expected to significantly decrease U.S. cash taxes in 2025, with no material impact on the effective tax rate[50](index=50&type=chunk) [4. Leases](index=19&type=section&id=4.%20Leases) Operating lease costs for 26 weeks were **$983.1 million**, with a weighted-average remaining lease term of **9.3 years** Operating Lease Costs (in millions) | Metric | 26 Weeks Ended Aug 1, 2025 (in millions) | 26 Weeks Ended Aug 2, 2024 (in millions) | | :----- | :--------------------------------------- | :--------------------------------------- | | Operating lease costs | $983.1 | $929.2 | - As of August 1, 2025, the weighted-average remaining lease term for operating leases was **9.3 years**, and the weighted average discount rate was **4.6%**[51](index=51&type=chunk) [5. Current and long-term obligations](index=20&type=section&id=5.%20Current%20and%20long-term%20obligations) Total debt was **$5.75 billion** as of August 1, 2025, with **$500 million** in senior notes redeemed and **$600 million** planned for redemption Current and Long-Term Obligations (in thousands) | Metric (in thousands) | August 1, 2025 | January 31, 2025 | | :-------------------- | :------------- | :--------------- | | Total Debt | $5,745,102 | $6,238,488 | | Less: current portion | $(19,326) | $(519,463) | | Long-term obligations | $5,725,776 | $5,719,025 | - The company has a **$2.375 billion** unsecured five-year revolving credit facility, maturing September 3, 2029, with no outstanding borrowings as of August 1, 2025[54](index=54&type=chunk)[57](index=57&type=chunk) - In April 2025, the company redeemed **$500.0 million** of 4.15% senior notes and plans to redeem **$600.0 million** of 3.875% senior notes in the third quarter of 2025[59](index=59&type=chunk)[124](index=124&type=chunk) [6. Assets and liabilities measured at fair value](index=22&type=section&id=6.%20Assets%20and%20liabilities%20measured%20at%20fair%20value) Liabilities measured at fair value, primarily debt and deferred compensation, are classified within Level 1 and Level 2 Fair Value Measurements at August 1, 2025 (in thousands) | Liabilities (in thousands) | Level 1 (Quoted Prices in Active Markets) | Level 2 (Significant Other Observable Inputs) | Total Fair Value at August 1, 2025 | | :------------------------- | :---------------------------------------- | :-------------------------------------------- | :--------------------------------- | | Current and long-term obligations | $5,499,954 | $171,551 | $5,671,505 | | Deferred compensation | $51,644 | — | $51,644 | - The company does not have any fair value measurements categorized within Level 3 as of August 1, 2025[60](index=60&type=chunk) [7. Commitments and contingencies](index=23&type=section&id=7.%20Commitments%20and%20contingencies) The company faces shareholder class action and derivative lawsuits, with outcomes uncertain but not expected to materially affect financial statements - The company is a party to shareholder class action lawsuits (e.g., Washtenaw County) and derivative actions (e.g., Silva, Dunn, Caliguiri) alleging federal securities law violations and breach of fiduciary duties[65](index=65&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) - The court granted defendants' motion to dismiss the second consolidated amended complaint in the Shareholder Securities Litigation without prejudice on June 23, 2025[65](index=65&type=chunk) - While the company believes pending legal matters will be resolved without a material adverse effect, adverse decisions or settlements could materially affect future operating results or financial statements[66](index=66&type=chunk)[70](index=70&type=chunk) [8. Segment reporting](index=25&type=section&id=8.%20Segment%20reporting) The company operates as one segment, with consumables accounting for **82.49%** of net sales for the 26 weeks ended August 1, 2025 - The company manages its business as one reportable operating segment, primarily within the United States[71](index=71&type=chunk) Net Sales by Product Category | Product Category | 13 Weeks Ended Aug 1, 2025 (% of Net Sales) | 13 Weeks Ended Aug 2, 2024 (% of Net Sales) | | :--------------- | :---------------------------------------- | :---------------------------------------- | | Consumables | 82.22% | 82.25% | | Seasonal | 10.31% | 10.33% | | Home products | 4.77% | 4.70% | | Apparel | 2.70% | 2.72% | | Product Category | 26 Weeks Ended Aug 1, 2025 (% of Net Sales) | 26 Weeks Ended Aug 2, 2024 (% of Net Sales) | | :--------------- | :---------------------------------------- | :---------------------------------------- | | Consumables | 82.49% | 82.52% | | Seasonal | 10.06% | 10.03% | | Home products | 4.81% | 4.77% | | Apparel | 2.64% | 2.68% | [9. Common stock transactions](index=26&type=section&id=9.%20Common%20stock%20transactions) **$1.38 billion** remains for share repurchases, but none are planned for 2025 to maintain credit rating, while **$0.59** quarterly dividends were paid - As of August 1, 2025, the company had approximately **$1.38 billion** available under its common stock repurchase program[75](index=75&type=chunk) - No shares were repurchased during the 26-week periods ended August 1, 2025, and August 2, 2024, and no repurchases are planned for the remainder of 2025 to maintain credit rating and financial flexibility[76](index=76&type=chunk)[138](index=138&type=chunk) - The company paid a quarterly cash dividend of **$0.59 per share** for the first two quarters of 2025 and declared another **$0.59 dividend** payable in October 2025[77](index=77&type=chunk) [Report of Independent Registered Public Accounting Firm](index=27&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP found no material modifications needed for interim financial statements to conform with U.S. GAAP - Ernst & Young LLP reviewed the interim financial statements and found no material modifications needed for conformity with U.S. GAAP[79](index=79&type=chunk) - The firm confirmed that the consolidated balance sheet as of January 31, 2025, is fairly stated in relation to the previously audited annual financial statements[80](index=80&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=28&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS.) Management discusses financial condition, operating results, key performance indicators, liquidity, capital resources, and strategic outlook [General](index=28&type=section&id=General) This section introduces the Management's Discussion and Analysis, to be read with financial statements and forward-looking statements disclosure - The discussion and analysis should be read with the unaudited consolidated financial statements and the cautionary disclosure regarding forward-looking statements[83](index=83&type=chunk) [Executive Overview](index=28&type=section&id=Executive%20Overview) Dollar General, a leading discount retailer, addresses macroeconomic pressures through strategic growth, operational efficiency, and employee development, showing progress in reducing inventory shrink - Dollar General is the largest discount retailer in the U.S. with **20,746 stores** in 48 states and Mexico as of August 1, 2025[84](index=84&type=chunk) - Key macroeconomic factors affecting customers include unemployment, inflation, wage growth, tax policies, interest rates, and government assistance programs. The reinstatement of defaulted student loan collections in May 2025 adds uncertainty[85](index=85&type=chunk) - The company's long-term operating priorities are: 1) driving profitable sales growth, 2) capturing growth opportunities, 3) enhancing its position as a low-cost operator, and 4) investing in team development[88](index=88&type=chunk) - The company is expanding digital initiatives (Dollar General app, third-party delivery, DG Media Network) and store remodels (Project Elevate, Project Renovate) to drive growth and enhance customer experience[93](index=93&type=chunk)[94](index=94&type=chunk) - In 2025, plans include opening approximately **575 new stores** (plus up to 15 in Mexico), remodeling **2,000 stores** via Project Renovate, **2,250** via Project Elevate, and relocating **45 stores**, totaling **4,885 real estate projects**[95](index=95&type=chunk) - The company has made progress in reducing inventory shrink for four consecutive quarters and saw improvement in damages during the first two quarters of 2025[92](index=92&type=chunk) [Key Performance Indicators](index=32&type=section&id=Key%20Performance%20Indicators) Key performance indicators show same-store sales growth of **2.6%** for 26 weeks, with improved average sales per square foot and inventory turnover Same-Store Sales | Metric | 13 Weeks Ended Aug 1, 2025 | 13 Weeks Ended Aug 2, 2024 | | :----- | :------------------------- | :------------------------- | | Same-store sales | 2.8% | 0.5% | | Metric | 26 Weeks Ended Aug 1, 2025 | 26 Weeks Ended Aug 2, 2024 | | :----- | :------------------------- | :------------------------- | | Same-store sales | 2.6% | 1.4% | Other Key Performance Indicators | Metric | August 1, 2025 | August 2, 2024 | | :----- | :------------- | :------------- | | Average sales per square foot | $266 | $263 | | Inventory turnover | 4.3 | 3.9 | [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Net sales increased by **5.2%** for 26 weeks, driven by new stores and same-store sales, with improved gross profit rates and increased SG&A expenses Results of Operations Summary | Metric | 13 Weeks Ended Aug 1, 2025 | 13 Weeks Ended Aug 2, 2024 | % Change (13 Weeks) | Basis Point Change (13 Weeks) | | :-------------------------------------- | :------------------------- | :------------------------- | :------------------ | :---------------------------- | | Net sales (in millions) | $10,727.7 | $10,210.4 | 5.1% | | | Gross profit (% of net sales) | 31.34% | 29.96% | | 137 | | SG&A expenses (% of net sales) | 25.79% | 24.58% | | 121 | | Operating profit (% of net sales) | 5.55% | 5.39% | | 16 | | Net income (in millions) | $411.4 | $374.2 | 10.0% | | | Diluted EPS | $1.86 | $1.70 | 9.4% | | | Metric | 26 Weeks Ended Aug 1, 2025 | 26 Weeks Ended Aug 2, 2024 | % Change (26 Weeks) | Basis Point Change (26 Weeks) | | :-------------------------------------- | :------------------------- | :------------------------- | :------------------ | :---------------------------- | | Net sales (in millions) | $21,163.7 | $20,124.4 | 5.2% | | | Gross profit (% of net sales) | 31.15% | 30.07% | | 108 | | SG&A expenses (% of net sales) | 25.62% | 24.62% | | 99 | | Operating profit (% of net sales) | 5.54% | 5.45% | | 9 | | Net income (in millions) | $803.4 | $737.5 | 8.9% | | | Diluted EPS | $3.64 | $3.35 | 8.7% | | - The increase in same-store sales for the 13-week period was driven by a **1.5% increase in customer traffic** and a **1.2% increase in average transaction amount**[113](index=113&type=chunk) - Gross profit rate increase was primarily due to lower shrink, higher inventory markups, and lower inventory damages, partially offset by an increased LIFO provision and increased markdowns[114](index=114&type=chunk)[118](index=118&type=chunk) - SG&A expenses increased as a percentage of net sales primarily due to higher incentive compensation, repairs and maintenance, and benefits (13 weeks) and retail labor (26 weeks)[115](index=115&type=chunk)[119](index=119&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity, plans **$1.3-1.4 billion** in capital expenditures for 2025, and manages debt redemptions while monitoring credit ratings - The company expects sufficient liquidity from cash flow, existing cash, and credit facilities to fund operations, capital spending, and dividends for the next several years[121](index=121&type=chunk)[123](index=123&type=chunk) - Capital expenditures for 2025 are projected to be approximately **$1.3 billion to $1.4 billion**, supporting new store growth, remodels, supply chain, and technology initiatives[135](index=135&type=chunk) Credit Ratings | Rating Agency | Senior unsecured debt rating | Commercial paper rating | Outlook | | :------------ | :--------------------------- | :---------------------- | :------------ | | Moody's | Baa3 | P-3 | Stable outlook| | Standard & Poor's | BBB | A-2 | Negative outlook| [Current Financial Condition / Recent Developments](index=38&type=section&id=Current%20Financial%20Condition%20%2F%20Recent%20Developments) Inventory represents **45%** of total assets, with credit ratings from Moody's (stable) and S&P (negative) impacting financing costs - Inventory balance represented approximately **45%** of total assets (excluding operating lease assets, goodwill, and other intangible assets) as of August 1, 2025[126](index=126&type=chunk) - Credit ratings impact financing costs and insurance premiums; maintaining or improving ratings is important[128](index=128&type=chunk) [Changes in Cash Flows](index=38&type=section&id=Changes%20in%20Cash%20Flows) Operating cash flow increased by **$162.1 million**, while financing cash flow increased due to debt repayments, and merchandise inventories decreased by **7.4%** per store Cash Flow Activity (26 Weeks, in millions) | Cash Flow Activity (26 Weeks) | 2025 (in millions) | 2024 (in millions) | Change (in millions) | | :---------------------------- | :----------------- | :----------------- | :------------------- | | Operating activities | $1,814.9 | $1,652.7 | $162.2 | | Investing activities | $(691.5) | $(694.2) | $2.7 | | Financing activities | $(771.4) | $(273.2) | $(498.2) | - Merchandise inventories decreased **2%** in the 2025 period compared to flat in the 2024 period. On a per-store basis, inventories decreased by **7.4%** at August 1, 2025, compared to August 2, 2024[132](index=132&type=chunk) Property and Equipment Purchases (26 Weeks, in millions) | Property and Equipment Purchases (26 Weeks, in millions) | 2025 | 2024 | | :------------------------------------------------------- | :----- | :----- | | Existing stores improvements, upgrades, remodels, and relocations | $365.4 | $255.0 | | Distribution and transportation-related capital expenditures | $151.1 | $198.7 | | New stores primarily for leasehold improvements, fixtures and equipment | $142.8 | $216.1 | | Information systems upgrades and technology-related projects | $32.2 | $19.6 | [Share Repurchase Program](index=40&type=section&id=Share%20Repurchase%20Program) **$1.38 billion** remains for share repurchases, but none are planned for 2025 to preserve the investment-grade credit rating and financial flexibility - Approximately **$1.38 billion** remains authorized under the common stock repurchase program as of August 1, 2025[137](index=137&type=chunk) - No shares were repurchased in the first quarter of 2025, and no repurchases are planned for the remainder of the year to preserve the investment-grade credit rating and financial flexibility[138](index=138&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=42&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK.) No material changes to quantitative and qualitative market risk disclosures have occurred since the prior annual report - No material changes to market risk disclosures since the Annual Report on Form 10-K for the fiscal year ended January 31, 2025[139](index=139&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=42&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES.) Disclosure controls and procedures were effective as of August 1, 2025, with no material changes in internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed effective as of August 1, 2025[140](index=140&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended August 1, 2025[141](index=141&type=chunk) [PART II—OTHER INFORMATION](index=43&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) Includes disclosures on legal proceedings, risk factors, other information, and a list of exhibits filed with the Form 10-Q [ITEM 1. LEGAL PROCEEDINGS](index=43&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS.) Legal proceedings disclosures, including shareholder class action and derivative lawsuits, are incorporated by reference from Note 7 - Legal proceedings information is incorporated by reference from Note 7 to the unaudited consolidated financial statements[144](index=144&type=chunk) [ITEM 1A. RISK FACTORS](index=43&type=section&id=ITEM%201A.%20RISK%20FACTORS.) No material changes to risk factors from the Annual Report on Form 10-K, except as noted in the 'Executive Overview' - No material changes to risk factors from the Annual Report on Form 10-K, except as noted in the 'Executive Overview' of this Form 10-Q[145](index=145&type=chunk) [ITEM 5. OTHER INFORMATION](index=43&type=section&id=ITEM%205.%20OTHER%20INFORMATION.) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended August 1, 2025[146](index=146&type=chunk) [ITEM 6. EXHIBITS](index=43&type=section&id=ITEM%206.%20EXHIBITS.) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and certifications - The exhibit index includes corporate governance documents, compensation agreements, certifications, and interactive data files in Inline XBRL format[147](index=147&type=chunk)[150](index=150&type=chunk) [Signature](index=45&type=section&id=Signature) This section contains the official signature confirming the submission of the report [Signature](index=45&type=section&id=Signature) The report was signed by Kelly M. Dilts, Executive Vice President & Chief Financial Officer, on August 28, 2025 - The report was signed by Kelly M. Dilts, Executive Vice President & Chief Financial Officer, on August 28, 2025[154](index=154&type=chunk)

Exhibit 99 Dollar General Corporation Reports Second Quarter 2025 Results Interest expense for the second quarter of 2025 decreased 15.3% to $57.7 million compared to $68.1 million in the second quarter of 2024. The effective income tax rate in the second quarter of 2025 was 23.5% compared to 22.3% in the second quarter of 2024. Raises Financial Guidance for Fiscal Year 2025 GOODLETTSVILLE, Tenn.--(BUSINESS WIRE)--Dollar General Corporation (NYSE: DG) today reported financial results for its fiscal year 202 ...