Dollar General, based in Goodlettsville, Tennessee, operates 20,000 discount stores across the United States and in Mexico. It generated $38.7 billion in sales in the fiscal year ended February 3, 2024. More than 80% of DG stores are in communities with populations of less than 20,000. Three quarters of the U.S. population lives within three miles of a Dollar General store. Total selling space is approximately 151 million square feet. DG is expanding its traditional store from 7,400 square feet to 8,500 or 9,500 to accommodate more refrigerators and a wider assortment. Sales were $263 per square foot in FY24. Stores sell everyday necessities that drive frequent visits. DG generates about 80% of sales from consumables such as cleaning supplies and over-the-counter medicines, and 10% of sales from seasonal products including toys. About 6% of sales come from home products such as light bulbs and storage containers and 4% from apparel. Most products are priced at $10 or less. The company's fiscal year ends on the Friday closest to January 31. The current year, which we call FY25, is a 52-week year ending on January 31, 2024. The company has about 170,000 employees.

Monday Tee Up: Closing in on Fed Day Investor focus swings back to inflation this week. The incoming CPI report is one of the last key reports before the Fed's highly anticipated rate meeting next week. Meanwhile, the swan song of earnings is out this week by way of Oracle, considered by many to be an early indicator for the next earnings cycle. Last week, the Dow Jones Industrial Average was down 2.9%, the S&P 500 shed 4.3%, and the Nasdaq plunged by 5.8%. Year to date, the DJIA is higher by 7%, the S&P by 13%, and the Nasdaq by 11%. On the economic calendar, the highlight of this week is the CPI report on Wednesday. In July, CPI posted at 2.9%. We see it sliding to 2.6% for August. Core CPI came in at 3.2% last month. We expect no change this month. On Thursday, more inflation data is due on the wholesale side, this via the Producer Price Index. And on Friday, Consumer Sentiment will be updated. Earnings season is essentially over, but as mentioned above, Oracle reports on Monday. On Tuesday, PetSmart, Petco, GameStop, and Dave & Buster's weight in, and on Thursday, Adobe and Kroger step to the plate. Earnings are 13% higher this quarter than a year ago, which is better than many expected. Information Technology was the winning sector, edging out Financial and Healthcare. All three were up more than 20% for the quarter compared to the same quarter last year. Materials was at the other end, down 6%. Though the overall results were good, many companies did mention that inflation hurt demand. Last week, the August jobs report sent mixed signals on the health of the labor market. Nonfarm Payrolls printed at 142,000 in August, below expectations of 165,000 and compared to a revised-down 89,000 in July. That showed a cooling labor market and was in synch with other jobs data out during the week. Still, the Unemployment Rate ticked down to 4.2% after the surprise jump last month to 4.3. Mortgage rates were flat at 6.35% for the average 30-year fixed-rate mortgage. Gas prices fell seven cents to $3.31 per gallon for the average price of regular gas. That is the fourth consecutive decline, with prices falling 5% for the month. The Atlanta Fed GDPNow indicator is forecasting for 3Q and calls for expansion of 2.1. The Cleveland Fed CPINow indicator is forecasting for September and is at 2.4%, down from its forecast for August. Looking ahead, the next Fed rate decision is on September 18, with odds at 100% for a rate cut. Of that, 70% expect a 25-basis-point (bps) cut and 30% expect a 50 bps cut, this according to the CME FedWatch Tool. There are two more Fed rate meetings this year, on November 7 and December 18. We expect three rate cuts this year for a total of 75 bps. We see two rate cuts in 2025. We forecasts all cuts to be by 25 bps.

With more than 20,000 locations, Dollar General’s banner is nearly ubiquitous across the rural United States. Dollar General serves as a convenient shopping destination for fill-in store trips, with its value proposition most relevant to consumers in small communities with a dearth of shopping options. The retailer operates a frugal store of about 7,500 square feet and primarily offers an assortment of branded and private-label consumable items (80% of net sales) such as paper and cleaning products, packaged and perishable food, tobacco, and health and beauty items at low prices. Dollar General also offers a limited assortment of seasonal merchandise, home products, and apparel. The firm sells most items at a price point of $10 or less.

With over 20,000 locations, Dollar General’s banner is nearly ubiquitous across the rural United States. Dollar General serves as a convenient shopping destination for fill-in store trips, with its value proposition most relevant to consumers in small communities with a dearth of shopping options. The retailer operates a frugal store of about 7,500 square feet and primarily offers an assortment of branded and private-label consumable items (80% of net sales) such as paper and cleaning products, packaged and perishable food, tobacco, and health and beauty items at low prices. Dollar General also offers a limited assortment of seasonal merchandise, home products, and apparel. The firm sells most items at a price point of $10 or less.