Dollar General Corporation

Dollar General Corporation is the largest discount retailer in the United States by number of stores, operating 21,055 locations across 48 states and Mexico as of the first quarter of fiscal 2026, and generating $42.7 billion in revenue in fiscal 2025. The company sells consumables, seasonal goods, home products, and apparel at everyday low prices — typically $10 or less — from small-box stores averaging 7,500 square feet, with roughly 80% of locations situated in towns of 20,000 or fewer people.

This is a recovery story dressed as a steady compounder. After decades of reliable growth, Dollar General hit a wall in fiscal 2023 and 2024: shrink spiked, margins compressed, and the core low-income customer buckled under persistent inflation. Net income fell by roughly a third in FY2024, operating margin halved from its FY2021 peak, and the stock — which had traded above $250 in 2022 — found a bottom below $70. FY2025 marked a sharp turn: shrink improved by nearly $300 million, gross margin recovered 107 basis points, and diluted EPS rebounded 34%. The question now is how much of that recovery is structural and how much is catch-up from an unsustainably low base. The file turns on whether Dollar General can compound its shrink and margin gains into a durable return to the 6–7% operating margins management has targeted in its long-term framework, or whether the business is settling into a permanently lower-margin reality in which 5% operating margins are the new normal.