Dollar General: Intense Focus

“It’s hard to be excellent… excellence takes intense focus.”

From “The DG Playbook” (March 2025):

“DG shares responded favorably to the Q4 FY24 results, which I think mainly reflects the clarity provided by management’s medium-term financial targets, along with a beaten down stock price… While DG’s 2025 guidance remains underwhelming, recovery is expected in 2026 and beyond; the key lever to that outcome will be improved performance at the current base of ~20,500 DG stores, not new unit growth. It seems this is the new status quo at Dollar General; the days of 5%+ unit growth are behind us. I think that’s clearly the appropriate response at this point in time, and I also think that it’s likely the proper long-term shift. Much like at Home Depot after the financial crisis, this is the time for management to zero in on improved productivity within the four walls of existing DG stores… Today’s setup [at ~$79 per share] can work very well if the unit economics improve alongside sound capital allocation.”