A well-known retail chain in the US, Dollar General has more than 17,000 locations spread throughout 46 states. The business has been in existence for more than 80 years and has expanded to rank among the biggest discount merchants in the nation. If you’re an investor, you might be considering whether to purchase or sell Dollar General. To assist you in making an informed choice, we will examine the company’s financial results and potential in this piece.
Let’s start by examining Dollar General’s financial situation. The business reported net sales of $33.7 billion in 2020, a 21.6% rise from the year before. Also increasing by 56.5% to $2.3 billion was its net income. The company’s low-cost business approach and emphasis on serving low- and middle-income customers have allowed it to sustain a consistent growth rate throughout the years. A similar upward trend has been observed in Dollar General’s profits per share (EPS), which increased from $6.65 in 2016 to $10.22 in 2020.
Let’s now assess Dollar General’s financial performance in comparison to that of its rivals. Another cheap retailer, Dollar Tree, recorded net sales of $25.6 billion in 2020, which were marginally less than Dollar General’s. However, compared to Dollar General, Dollar Tree had a net income of only $1.5 billion. Targeting teenagers and young people, Five Below recorded net sales of $1.8 billion in 2020, which is significantly less than either Dollar General or Dollar Tree. These figures demonstrate that Dollar General is beating its rivals and is in a solid financial position.
Moving on to the following relevant issue, Dollar General stores are not franchises, although Five Below is. All of Dollar General’s shops are owned and run by the corporation, giving it additional control over its business operations and enabling it to maintain a unified brand and pricing strategy nationwide. To find and construct new store locations, Dollar General does have a real estate division that collaborates with developers.
What is the duration of construction of a Dollar General store? The company’s website states that the entire process of building a store normally takes four months. Site selection, design, permitting, and construction are all included in this. The business moves quickly to open the store as soon as feasible after choosing a location.
In conclusion, Dollar General appears to be a smart buy for investors based on its strong financial performance and position in the market. The business has a track record of profitability and development, and its low-cost business strategy and emphasis on serving clients with low and moderate incomes position it for long-term success. Regarding relevant inquiries, a Dollar General store can be built in roughly four months. Five Below is a franchise.