Alejandro and Michelle discuss Dollar General, a discount retailer operating almost 20,000 stores.
Alejandro shared his financial analysis of Dollar General’s balance sheet, debt, and cash flows.
Dollar General has excelled in serving towns of 20,000 people or less, finding a niche market where Walmart doesn’t venture.
Even though Dollar General and Dollar Tree tend to serve similar demographics, they are not the same type of business concept. Dollar Tree is a dollar (or $1.25) store, whereas Dollar General tends to sell items between $1 to $10.
While Dollar General has been doing well in expanding its store footprint by a 1,000 more stores in each of the last three years, it has also been racking up debt at higher interest rates.
The stock of Dollar General (DG) recently cratered, and some suspect it was due to weaker consumer spending leading to softer sales trends.
It’s definitely an interesting case to study, as there could be a lot of potential for this company if it can steady its course.
I also mentioned an open question as to whether a company like Dollar General helps its communities be uplifted, or if it its business model may contribute to a perpetuation of lower socio-economic outcomes. So much to study!
It was really kind of Alejandro to present his company analysis with me, so thank you my friend!
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