Where Will Dollar General Be in 3 Years?

Company Overview - Dollar General is the largest retailer in the US by store count, with over 20,000 stores, significantly more than any other retailer [1] - The company's stock gained over 1,000% from its IPO in 2009 to its peak in 2022, but has since declined by 71% from that peak [2][3] Financial Performance - Dollar General's gross margin is currently at 29%, the lowest since its IPO, and its operating margin is at a historic low of 5% over the last four quarters [5] - Despite struggles, the company has managed to grow same-store sales and revenue, although profits have fallen [7] Growth Strategy - Dollar General plans to open 575 stores annually over the next three years, aiming to reach approximately 22,000 stores, a 9% increase from its current base [4] - The company forecasts revenue growth of 15%-20% over the next three years, reaching $46.7 billion to $48.7 billion, driven by store expansion and modest same-store sales growth of 2%-3% annually [13] Turnaround Efforts - Dollar General is implementing a "Back to Basics" strategy, focusing on improved inventory management, reducing theft, and enhancing customer experience [11] - The company is piloting same-day delivery through its DG app and has partnered with DoorDash to offer delivery from around 16,000 stores [12] - Store remodels under Project Elevate aim to remodel 2,250 older stores, with 2,000 full remodels and 575 new store openings planned for fiscal 2025 [12] Operational Improvements - Management expects store remodels to increase same-store sales by 6%-8%, partly due to adding more coolers for perishable foods [8] - The company is improving its supply chain to remove capacity constraints and investing in private brands to remain competitive on price [7] Future Outlook - With modest improvements, Dollar General aims to increase its operating margin from 5% to 7%, which, combined with revenue growth, could lift operating profit by nearly 70% over the next three years [14] - The company's position in 2027 will depend on the success of its turnaround efforts, including store expansion, margin improvement, and execution of its strategic initiatives [9][10]