Dollar General Provides Outline of Strategic Plans to Deliver on Its Growth Model; Company Announces Plans to Accelerate New Store Openings to 1,000 in 2017
Wed, 23 Mar 2016
“Dollar General has a powerful strategic plan that enables us to drive both the top line and bottom line to deliver strong financial returns as outlined in our growth model over the long-term. With strong cash flow and an efficient capital structure, we believe that we have a compelling opportunity to invest for growth while also returning cash to shareholders through consistent share repurchases and anticipated quarterly dividends,” said Vasos.
Financial Growth Outlook
The Company has recently established a financial growth model that is focused on long-term shareholder value creation. Key components of the model include:
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|
Annual Target |
||||||||
|
|
+7 to 10% | ||||||||
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- Square Footage |
+6 to 8% | ||||||||
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- Same-Store Sales |
+2 to 4% | ||||||||
| Operating Profit | +7 to 11% | ||||||||
| Diluted Earnings per Share | +10 to 15% | ||||||||
| Cash from Operations | 7 to 8% of Sales | ||||||||
| Capital Expenditures | 2 to 3% of Sales | ||||||||
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Annual Shareholder Return |
+11 to 17% | ||||||||
The Company plans to open approximately 900 new stores and relocate or remodel 875 stores in fiscal 2016. For fiscal 2017, the Company is forecasting approximately 1,000 new stores and relocations or remodels of about 900 stores, in line with its growth model of six to eight percent square footage growth.
The Company intends to use the financial growth model in discussions of
its business in 2016 and in future years, and by doing so the Company
does not undertake to update any portion of the growth model except as
specified in its earnings press release issued on
Tomorrow’s conference will begin at
Forward-Looking Statements
This press release contains forward-looking information, such as the
information in the section entitled “Financial Growth Outlook” as well
as other statements regarding the Company’s outlook, plans and
intentions, including, but not limited to, statements made within the
quotations of
- economic conditions, including their effect on employment levels, consumer demand, disposable income, credit availability and spending patterns, inflation, commodity prices, fuel prices, interest rates, exchange rate fluctuations and the cost of goods;
- failure to successfully execute the Company’s strategies and initiatives, including those relating to merchandising, sourcing, shrink, private brand, distribution and transportation, store operations, store formats, budgeting and expense reduction, and real estate;
- failure to open, relocate and remodel stores profitably and on schedule, as well as failure of the Company’s new store base to achieve sales and operating levels consistent with the Company’s expectations;
- levels of inventory shrinkage;
- effective response to competitive pressures and changes in the competitive environment and the markets where the Company operates, including consolidation;
- the Company’s level of success in gaining and maintaining broad market acceptance of its private brands;
- disruptions, unanticipated or unusual expenses or operational failures in the Company’s supply chain including, without limitation, a decrease in transportation capacity for overseas shipments, increases in transportation costs (including increased fuel costs and carrier rates or driver wages), work stoppages or other labor disruptions that could impede the receipt of merchandise, or delays in constructing or opening new distribution centers;
- risks and challenges associated with sourcing merchandise from suppliers, including, but not limited to, those related to international trade;
- unfavorable publicity or consumer perception of the Company’s products, including, but not limited to, related product liability and food safety claims;
- the impact of changes in or noncompliance with governmental laws and regulations (including, but not limited to, environmental compliance, product safety, food safety, information security and privacy, and labor and employment laws, as well as tax laws, the interpretation of existing tax laws, or our failure to sustain our reporting positions negatively affecting the Company’s tax rate) and developments in or outcomes of private actions, class actions, administrative proceedings, regulatory actions or other litigation;
- natural disasters, unusual weather conditions, pandemic outbreaks, terrorist acts and geo-political events;
- damage or interruption to the Company’s information systems or failure of technology initiatives to deliver desired or timely results;
- ability to attract and retain qualified employees, while controlling labor costs (including anticipated regulatory changes related to overtime exemption under Fair Labor Standards Act) and other labor issues;
- the Company’s loss of key personnel, inability to hire additional qualified personnel or disruption of executive management as a result of retirements or transitions;
- failure to successfully manage inventory balances;
- seasonality of the Company’s business;
- incurrence of material uninsured losses, excessive insurance costs or accident costs;
- failure to maintain the security of information that the Company holds, whether as a result of a data security breach or otherwise;
- deterioration in market conditions, including market disruptions, limited liquidity and interest rate fluctuations, or a lowering of the Company’s credit ratings;
- new accounting guidance, or changes in the interpretation or application of existing guidance, such as changes to lease accounting guidance;
- the factors disclosed under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K; and
- such other factors as may be discussed or identified in this press release.
All forward-looking statements are qualified in their entirety by these
and other cautionary statements that the Company makes from time to time
in its
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