Dollar General Financial Model
Retail Company Financials Example (Free Excel Download)
Dollar General is the largest discount retailer in the United States by store count, operating over 20,500 small-box stores primarily in rural and suburban markets.
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About this model
This model projects Dollar General's three-statement financials to determine its intrinsic equity valuation and assess its capacity to sustain store expansion and dividend growth amidst fluctuating consumer demand and margin pressures.
Dollar General is the largest discount retailer in the United States by store count, operating over 20,500 small-box stores primarily in rural and suburban markets. The company provides everyday essentials at low prices, with a heavy reliance on its Consumables segment (82% of revenue), followed by Seasonal (10%), Home Products (5%), and Apparel (3%). The business operates 100% in North America, spanning 48 US states and a small but growing presence in Mexico. Dollar General utilises an asset-light real estate model by leasing the vast majority of its stores, allowing for rapid footprint expansion and high returns on invested capital. It holds a dominant competitive position in rural areas where it often serves as the primary general store, competing broadly with Family Dollar, Walmart, and regional grocers. Recently, the company navigated significant margin pressure from retail shrink and inventory markdowns, prompting the return of former CEO Todd Vasos in late 2023 to stabilise operations, which resulted in a recovery to $42.7 billion in sales for fiscal 2025.
The downloadable Dollar General financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsDollar General financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $34.22B | $37.84B | $38.69B | $40.61B | $42.72B |
| Gross profit | $10.81B | $11.82B | $11.72B | $12.02B | $13.10B |
| Operating income | $3.22B | $3.33B | $2.45B | $1.71B | $2.20B |
| Net income | $2.40B | $2.42B | $1.66B | $1.13B | $1.51B |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
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How to build a detailed financial model for Dollar General
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Consumables
- Segment name: Consumables
- Revenue driver formula: Total Store Count x Average Square Footage per Store x Sales per Square Foot x Consumables Mix %
- Historical growth rate: 5-7% CAGR
- Key growth levers and headwinds: Inflation in food prices, SNAP benefit reductions, and the expansion of fresh produce and cooler doors across the store base.
- Pricing dynamics: Highly competitive, everyday low pricing (EDLP) strategy with many items priced at or below $1.
- Revenue recognition: Point of sale.
- Seasonality: Relatively stable, with a slight uptick in Q4 due to holiday food purchases.
Seasonal
- Segment name: Seasonal
- Revenue driver formula: Total Store Count x Average Square Footage per Store x Sales per Square Foot x Seasonal Mix %
- Historical growth rate: 2-4% CAGR
- Key growth levers and headwinds: Weather patterns, holiday spending strength, and discretionary income levels of low-income consumers.
- Pricing dynamics: Promotional pricing to clear inventory post-holidays.
- Revenue recognition: Point of sale.
- Seasonality: Highly seasonal, peaking in Q4 (Christmas) and Q1 (Easter/Spring).
Home Products
- Segment name: Home Products
- Revenue driver formula: Total Store Count x Average Square Footage per Store x Sales per Square Foot x Home Products Mix %
- Historical growth rate: 1-3% CAGR
- Key growth levers and headwinds: Housing mobility, discretionary spending, and competition from big-box retailers.
- Pricing dynamics: Value-oriented with high private label penetration.
- Revenue recognition: Point of sale.
- Seasonality: Stronger in Q1 and Q3 (spring cleaning, back-to-school and college dorm outfitting).
Apparel
- Segment name: Apparel
- Revenue driver formula: Total Store Count x Average Square Footage per Store x Sales per Square Foot x Apparel Mix %
- Historical growth rate: Flat to 2% CAGR
- Key growth levers and headwinds: Shift towards basic apparel and ongoing inventory rationalisation.
- Pricing dynamics: Extreme value pricing.
- Revenue recognition: Point of sale.
- Seasonality: Peaks in Q3 (back-to-school) and Q4 (winter wear).
Cost Structure
Variable Costs / COGS
- Line-by-line breakdown: Inventory costs, inbound freight, distribution centre costs, inventory shrink, markdowns, and LIFO provision.
- Gross margin range: 30.0% to 32.0% (FY2025 Q4 was 30.4%).
- Key input costs: Diesel fuel for freight, commodity costs for private label goods, and overseas shipping rates.
- How COGS scales: Highly linear with sales volume, but shrink and markdowns can cause step-function margin degradation.
Operating Expenses
- R&D: 0% (not applicable for this retailer).
- SG&A: Store labour, occupancy costs (rent, utilities), advertising, depreciation of store fixtures, and corporate overhead.
- Depreciation & Amortisation: Typically 2.5% to 3.0% of revenue, heavily tied to store fixtures and distribution centres.
- Stock-Based Compensation: Minimal, typically under 0.2% of revenue.
- Restructuring / one-time charges: Occasional store portfolio optimisation charges, such as the $232 million charge in FY2024 for store closures and pOpshelf impairment.
Margin Profile
- Gross margin: 30.0% to 32.0%.
- EBITDA margin: 8.5% to 10.5%.
- Operating margin: 5.0% to 7.0% (FY2025 operating profit was $2.2 billion on $42.7 billion sales).
- Net margin: 3.0% to 4.5%.
- Margin trend: Compressing in 2023 and 2024 due to shrink and wage inflation, stabilising in 2025 due to lower shrink and higher inventory markups.
Balance Sheet Structure
- Total assets: Approximately $29 billion to $31 billion.
- Key asset categories: Operating lease right-of-use assets (largest non-current asset), Merchandise Inventories ($6.3 billion in FY2025), and Net PP&E.
- Goodwill & intangibles: Approximately 15% of total assets stemming from legacy buyouts.
- Working capital profile:
- Days Sales Outstanding (DSO): 1 to 3 days (mostly cash and credit card at point of sale).
- Days Inventory Outstanding (DIO): 85 to 95 days.
- Days Payable Outstanding (DPO): 55 to 65 days.
- Net working capital as % of revenue: Positive but low.
- Is working capital positive or negative? The company relies on inventory turnover and vendor terms, but working capital is generally a slight use of cash during expansion.
- PP&E: Store fixtures, distribution centres, and refrigerated transport. Useful life is 3 to 10 years for fixtures and up to 40 years for owned buildings.
- Right-of-use assets / operating leases: Highly material, representing over $10 billion due to the leased store model.
Capital Expenditure & Investment
- Capex as % of revenue: 3.5% to 4.5%.
- Maintenance capex vs. growth capex: Approximately 40% maintenance (remodels, cooler additions) and 60% growth (new store builds, new distribution centres).
- Major capex programmes underway or planned: Rural store expansion, pOpshelf rollout, and fresh produce cooler installations.
- Capitalised software / development costs: Minimal.
- M&A pattern: Organic grower. Very rare bolt-on acquisitions.
- Typical acquisition multiple paid: Not applicable.
Debt & Capital Structure
- Total debt: Approximately $6 billion to $7 billion (excluding operating lease liabilities).
- Debt/EBITDA ratio: Target is around 2.5x to 3.0x.
- Credit rating: Investment grade (Baa2/BBB).
- Key debt instruments: Senior unsecured notes, commercial paper programme, and an unsecured revolving credit facility.
- Maturity profile: Laddered bond maturities over the next 10 to 30 years.
- Interest rate profile: Predominantly fixed-rate bonds, weighted average cost around 4.0% to 5.0%.
- Covenants: Standard interest coverage and leverage ratios on the revolver.
- Share repurchase programme: Historically active but paused in late 2023 and 2024 to protect the balance sheet.
- Dividend policy: Consistent payer, yield around 1.5% to 2.5%, with a quarterly dividend of $0.59 per share in early 2025.
Cash Flow Characteristics
- Operating cash flow conversion: 1.2x to 1.5x Net Income, driven by high depreciation and non-cash lease expenses.
- Free cash flow margin: 2.0% to 4.0%.
- Major non-cash items: Depreciation, non-cash lease cost, LIFO provision, and deferred income taxes.
- Working capital cash flow impact: Inventory build is a major use of cash ahead of the holiday season.
- Capex intensity: Moderate, driven by the sheer volume of new store openings (approximately 700 to 1,000 per year).
- Cash tax rate vs. GAAP effective tax rate: Tracks closely to the GAAP effective tax rate of 22.0% to 23.5%.
Sheet Structure
- Assumptions: Hardcoded inputs for store growth, same-store sales, margins, working capital days, and tax rates.
- Store Rollforward: Beginning store count, new openings, closures, ending store count, and average square footage.
- Revenue Build: Same-store sales growth (Traffic vs Ticket), total square footage, sales per square foot, and revenue broken out by Consumables, Seasonal, Home Products, and Apparel.
- Income Statement: Revenue, COGS, Gross Profit, SG&A, D&A, Operating Profit, Interest Expense, Tax, and Net Income.
- Working Capital: Schedules for Accounts Receivable, Inventory, Accounts Payable, and accrued liabilities based on days outstanding.
- PP&E & Leases: Capex schedule, depreciation waterfall, and operating lease ROU asset and liability rollforward.
- Debt Schedule: Commercial paper, senior notes, interest expense calculation, and debt paydown logic.
- Cash Flow Statement: Operating Cash Flow, Investing Cash Flow, Financing Cash Flow, and ending cash balance.
- Balance Sheet: Assets, Liabilities, and Shareholders' Equity.
- Valuation: DCF using unlevered free cash flow, WACC calculation, and terminal multiple approach.
Key Financial Relationships
- Ending Store Count = Beginning Store Count + New Store Openings - Store Closures
- Total Square Footage = Ending Store Count x Average Square Footage per Store
- Same-Store Sales Growth = Customer Traffic Growth + Average Transaction Amount Growth
- Total Net Sales = Prior Year Net Sales x (1 + Same-Store Sales Growth) + Sales from New Stores
- Consumables Revenue = Total Net Sales x Consumables Mix %
- Seasonal Revenue = Total Net Sales x Seasonal Mix %
- Home Products Revenue = Total Net Sales x Home Products Mix %
- Apparel Revenue = Total Net Sales x Apparel Mix %
- Cost of Goods Sold = Total Net Sales x (1 - Gross Margin %)
- SG&A Expense = Total Net Sales x SG&A % of Sales
- Ending Inventory = (Cost of Goods Sold / 365) x Days Inventory Outstanding
- Operating Lease Expense = Straight-line rent expense included in SG&A
- Interest Expense = Average Debt Balance x Weighted Average Interest Rate
- Free Cash Flow = Cash from Operations - Capital Expenditures
Cross-Sheet Dependencies
The Assumptions sheet feeds the Store Rollforward and Revenue Build. The Revenue Build drives the top line of the Income Statement and the activity levels in Working Capital. Working Capital outputs feed the operating section of the Cash Flow Statement. The PP&E & Leases sheet calculates depreciation and rent expense, which flow into the Income Statement (SG&A) and the Cash Flow Statement. The Debt Schedule calculates interest expense for the Income Statement and debt cash flows for the Cash Flow Statement. The Cash Flow Statement determines the ending cash balance, which links to the Balance Sheet to ensure Total Assets equal Total Liabilities plus Equity. The critical chain is Store Count to Revenue to Net Income to Operating Cash Flow to Ending Cash to Balance Sheet balancing. Circularity can occur in the interest expense calculation if interest depends on the average debt balance, which depends on the cash shortfall funded by the revolver.
Sign Convention
Revenue and income items are positive. Expenses (COGS, SG&A, Interest, Taxes) are entered as positive numbers and subtracted in subtotals. Assets are positive. Liabilities and Equity are positive. On the Cash Flow Statement, cash inflows are positive, and cash outflows (capex, debt repayment, dividends) are negative. Working capital increases in assets are negative (use of cash), and increases in liabilities are positive (source of cash).
Things Most Likely to Go Wrong
- Failing to account for the LIFO provision in COGS, which Dollar General uses and can swing gross margins significantly during inflationary periods.
- Mishandling the operating lease right-of-use assets and liabilities, which are massive and distort traditional return on capital metrics if not treated correctly.
- Overestimating margin expansion by ignoring the structural headwinds of retail shrink and inventory damages that have plagued the company recently.
- Modelling store growth linearly without accounting for the drag of store closures and relocations in the net store count.
- Disconnecting Same-Store Sales from total revenue growth. Total growth must equal SSS growth plus the weighted contribution of new square footage.
- Ignoring the mix shift. Consumables have lower gross margins than Seasonal and Home Products. If Consumables grow faster, overall gross margin will compress.
- Miscalculating Days Inventory Outstanding by using total revenue instead of COGS, leading to vastly understated inventory balances.
- Forgetting to include the quarterly dividend payments in the financing cash flows, which are a material use of cash.
Validation Checks
- Gross margin should remain between 30.0% and 32.0%. Flag if outside this band.
- SG&A as a percentage of sales should be between 24.0% and 26.5%.
- Total Assets must equal Total Liabilities plus Equity in every period.
- Consumables revenue must represent approximately 80% to 83% of total sales.
- Capex as a percentage of revenue should run between 3.0% and 4.5%.
- Operating Cash Flow to Net Income conversion should be consistently greater than 1.1x.
- Debt to EBITDA should remain below 3.5x to maintain the investment-grade rating.
- The effective tax rate should be between 22.0% and 23.5%.
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| Net Store Additions | 700 | Stores | Based on recent management guidance for new openings net of closures |
| Same-Store Sales Growth | 2.5 | % | Midpoint of recent historical performance and FY2025 actuals |
| Consumables Mix | 82.0 | % | Actual reported mix for FY2025 |
| Seasonal Mix | 10.0 | % | Actual reported mix for FY2025 |
| Home Products Mix | 5.0 | % | Actual reported mix for FY2025 |
| Apparel Mix | 3.0 | % | Actual reported mix for FY2025 |
| Gross Margin | 30.5 | % | Reflects recent stabilisation post-shrink headwinds |
| SG&A as % of Sales | 25.0 | % | Aligns with FY2025 run rate |
| Days Inventory Outstanding | 90 | Days | Calculated from $6.3B inventory and recent COGS |
| Days Payable Outstanding | 60 | Days | Historical average based on vendor terms |
| Capex as % of Sales | 3.5 | % | Standard run rate for store buildouts and remodels |
| Effective Tax Rate | 23.0 | % | Actual reported rate for FY2025 |
| Dividend per Share | 2.36 | $ | Annualised based on $0.59 quarterly dividend |
| Weighted Average Interest Rate | 4.5 | % | Blended rate on existing senior notes |
| WACC | 7.5 | % | Standard discount rate for stable consumer staples retail |
| Terminal Growth Rate | 2.0 | % | Long-term GDP and inflation proxy |
Data Sources & Benchmarks
- SEC EDGAR: Dollar General (DG) 10-K and 10-Q filings.
- Investor Relations: investor.dollargeneral.com for earnings presentations and store count updates.
- Key peers for benchmarking: Dollar Tree (DLTR), Walmart (WMT), Target (TGT), Tractor Supply (TSCO).
- Industry data sources: National Retail Federation (NRF) for consumer spending trends, USDA for food inflation data.
- Consensus estimates: Bloomberg or FactSet for forward-looking SSS and margin expectations.
Sources
- Dollar General Corporation FY2025 Earnings Release (March 2026)
- Dollar General Corporation 2024 Annual Report on Form 10-K
- Dollar General Corporation 2024 Corporate Social Responsibility and Sustainability Report
- SEC EDGAR Database (https://www.sec.gov/edgar/searchedgar/companysearch)
- Dollar General Investor Relations (https://investor.dollargeneral.com)
Do more with the Dollar General model
Frequently asked
What does Dollar General do and where does it operate?+
Dollar General is the largest discount retailer in the United States by store count, operating over 20,500 small-box stores primarily in rural and suburban markets. The company provides everyday essentials at low prices across 48 US states and a growing presence in Mexico.
What are Dollar General's main revenue sources?+
Dollar General primarily generates revenue from its Consumables segment, which accounts for 82% of its total sales. Other segments contributing to revenue include Seasonal (10%), Home Products (5%), and Apparel (3%).
What is Dollar General's capital expenditure strategy?+
Dollar General's capital expenditure as a percentage of revenue typically ranges from 3.5% to 4.5%. Approximately 60% of this capex is allocated to growth initiatives like new store builds and distribution centers, while 40% is for maintenance activities such as remodels and cooler additions.
How has Dollar General managed its operating margins recently?+
Dollar General recently navigated significant margin pressure from retail shrink and inventory markdowns. The return of former CEO Todd Vasos in late 2023 aimed to stabilize operations, which contributed to a recovery in sales to $42.7 billion for fiscal 2025.
What is the purpose of the Dollar General financial model?+
The Dollar General financial model projects the company's three-statement financials to determine its intrinsic equity valuation. It also assesses Dollar General's capacity to sustain store expansion and dividend growth amidst market fluctuations.
Can I download an Excel financial model for Dollar General?+
Yes, an Excel financial model for Dollar General is available for download. This model projects the company's financials from FY2026 through FY2030 and includes key assumptions like revenue growth and COGS as a percentage of revenue.
Have more financial modelling questions? Contact us
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