Dollar General Corporation

Dollar General Corporation is the largest discount retailer in the United States by store count, operating 20,959 small-box stores across 48 states and 17 stores in Mexico as of 27 February 2026, and selling everyday necessities — food, paper, cleaning products, health and beauty, seasonal goods, home products and basic apparel — at everyday low prices that are typically $10 or less.

This is a file about a mature franchise that broke, was repaired, and now has to prove the repair is permanent. Dollar General spent three decades compounding by opening stores in small towns other retailers ignored, and the formula worked because the stores were cheap to build, cheap to run, and sat within five miles of roughly 75% of the American population. Then the model seized up. Fiscal 2024 operating profit fell 29.9% to $1.71bn as inventory shrink, damages and markdowns swamped a customer who was herself under pressure, and the company took a $214.2m fourth-quarter impairment charge against a store portfolio it had been expanding by 589 to 987 new stores a year. Todd Vasos, who had run the company from 2015 to 2022, was brought back as chief executive in October 2023, and the recovery since has been real: fiscal 2025 operating profit rose 28.6% to $2.20bn, and the second quarter of fiscal 2026 delivered a 6.8% operating margin, 126 basis points better than the prior year.

The central question is what you are paying for. Dollar General is no longer a unit-growth story — management is opening roughly 450 U.S. stores a year against 589 in 2025, and is steering capital into 4,250 remodels instead. What remains is a comps-and-margin story in a business where the merchandise mix is 82% consumables, the balance sheet carries $15.77bn of debt once operating leases are counted, and the tax rate is about to rise because a jobs credit expired. The file turns on whether the margin recovery is structural — shrink and damages genuinely fixed, mix improving, new profit pools such as the media network scaling — or whether it is a cyclical gift from a strained consumer and a one-time tariff refund, and therefore worth a materially lower multiple.