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DG – Market expectations are for Uniform ROA to decline, but management is confident about sales, DG Fresh, and digital engagement

July 27, 2021

  • Dollar General Corporation (DG:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 24.1x Uniform P/E. Even at these levels, the market is pricing in expectations for profitability to decline, but management is confident about sales, DG Fresh, and digital engagement.
  • Specifically, management is confident they expect better comparable sales performance in H2 2021 and are on track to install approximately 65,000 cooler doors in 2021 for their DG Fresh initiative. They are also confident they will drive higher digital engagement and customer loyalty and that both non-consumables and consumables have grown sequentially on a 2-year stack basis.