DOLLAR GENERAL CORP 10-Q

ITEM 1. FINANCIAL STATEMENTS . ​ DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ ​ ​ May 3, ​ February 2, ​ ​ ​ 2024 ​ 2024 ASSETS ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 720,700 ​ $ 537,283 ​ Merchandise inventories ​ 6,934,389 ​ 6,994,266 ​ Income taxes receivable ​ ​ 34,946 ​ ​ 112,262 ​ Prepaid expenses and other current assets ​ 406,936 ​ 366,913 ​ Total current assets ​ 8,096,971 ​ 8,010,724 ​ Net property and equipment ​ 6,172,496 ​ 6,087,722 ​ Operating lease assets ​ ​ 11,138,733 ​ ​ 11,098,228 ​ Goodwill ​ 4,338,589 ​ 4,338,589 ​ Other intangible assets, net ​ 1,199,700 ​ 1,199,700 ​ Other assets, net ​ 63,010 ​ 60,628 ​ Total assets ​ $ 31,009,499 ​ $ 30,795,591 ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ ​ Current portion of long-term obligations ​ $ 769,139 ​ $ 768,645 ​ Current portion of operating lease liabilities ​ ​ 1,406,970 ​ ​ 1,387,083 ​ Accounts payable ​ 3,472,487 ​ ​ 3,587,374 ​ Accrued expenses and other ​ 976,076 ​ ​ 971,890 ​ Income taxes payable ​ 17,190 ​ ​ 10,709 ​ Total current liabilities ​ 6,641,862 ​ 6,725,701 ​ Long-term obligations ​ 6,222,387 ​ 6,231,539 ​ Long-term operating lease liabilities ​ ​ 9,723,314 ​ ​ 9,703,499 ​ Deferred income taxes ​ 1,157,660 ​ 1,133,784 ​ Other liabilities ​ 264,097 ​ 251,949 ​ Commitments and contingencies ​ ​ ​ ​ ​ ​ ​ Shareholders’ equity: ​ ​ ​ ​ ​ ​ ​ Preferred stock ​ — ​ ​ — ​ Common stock ​ 192,407 ​ 192,206 ​ Additional paid-in capital ​ 3,774,363 ​ 3,757,005 ​ Retained earnings ​ 3,032,996 ​ 2,799,415 ​ Accumulated other comprehensive income (loss) ​ 413 ​ 493 ​ Total shareholders’ equity ​ 7,000,179 ​ 6,749,119 ​ Total liabilities and shareholders' equity ​ $ 31,009,499 ​ $ 30,795,591 ​ ​ See notes to condensed consolidated financial statements. ​ ​ 2 ​ DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the 13 weeks ended ​ ​ May 3, May 5, ​ ​ 2024 ​ 2023 ​ Net sales ​ $ 9,914,021 ​ $ 9,342,832 ​ Cost of goods sold ​ 6,921,872 ​ 6,387,358 ​ Gross profit ​ 2,992,149 ​ 2,955,474 ​ Selling, general and administrative expenses ​ 2,446,045 ​ 2,214,616 ​ Operating profit ​ 546,104 ​ 740,858 ​ Interest expense, net ​ 72,433 ​ 83,038 ​ Income before income taxes ​ 473,671 ​ 657,820 ​ Income tax expense ​ 110,354 ​ 143,440 ​ Net income ​ $ 363,317 ​ $ 514,380 ​ Earnings per share: ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 1.65 ​ $ 2.35 ​ Diluted ​ $ 1.65 ​ $ 2.34 ​ Weighted average shares outstanding: ​ ​ ​ ​ ​ ​ ​ Basic ​ 219,748 ​ 219,193 ​ Diluted ​ ​ 220,052 ​ ​ 220,107 ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividends per share ​ $ 0.59 ​ $ 0.59 ​ ​ See notes to condensed consolidated financial statements. ​ ​ 3 ​ DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ For the 13 weeks ended ​ May 3, ​ May 5, ​ 2024 2023 Net income $ 363,317 ​ $ 514,380 Unrealized net gain (loss) on hedged transactions and currency translation, net of related income tax expense (benefit) of $ 0 and $ 86 , respectively ( 80 ) ​ 605 Comprehensive income $ 363,237 ​ $ 514,985 ​ See notes to condensed consolidated financial statements. ​ ​ 4 ​ DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited) (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ Common ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ Stock ​ Common ​ Paid-in ​ Retained ​ Comprehensive ​ ​ ​ ​ ​ ​ Shares ​ Stock ​ Capital ​ Earnings ​ Income (Loss) ​ Total ​ Balances, February 2, 2024 219,663 ​ $ 192,206 ​ $ 3,757,005 ​ $ 2,799,415 ​ $ 493 ​ $ 6,749,119 ​ Net income — ​ — ​ — ​ 363,317 ​ — ​ 363,317 ​ Dividends paid, $ 0.59 per common share ​ — ​ ​ — ​ ​ — ​ ​ ( 129,736 ) ​ ​ — ​ ​ ( 129,736 ) ​ Unrealized net gain (loss) on hedged transactions and currency translation — ​ — ​ — ​ — ​ ( 80 ) ​ ( 80 ) ​ Share-based compensation expense — ​ — ​ 21,846 ​ — ​ — ​ 21,846 ​ Other equity and related transactions 230 ​ 201 ​ ( 4,488 ) ​ — ​ — ​ ( 4,287 ) ​ Balances, May 3, 2024 219,893 ​ $ 192,407 ​ $ 3,774,363 ​ $ 3,032,996 ​ $ 413 ​ $ 7,000,179 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances, February 3, 2023 219,105 ​ $ 191,718 ​ $ 3,693,871 ​ $ 1,656,140 ​ $ 43 ​ $ 5,541,772 ​ Net income — ​ ​ — ​ ​ — ​ 514,380 ​ — ​ 514,380 ​ Dividends paid, $ 0.59 per common share ​ — ​ ​ — ​ ​ — ​ ​ ( 129,402 ) ​ ​ — ​ ​ ( 129,402 ) ​ Unrealized net gain (loss) on hedged transactions and currency translation — ​ ​ — ​ ​ — ​ — ​ 605 ​ 605 ​ Share-based compensation expense — ​ ​ — ​ ​ 25,083 ​ — ​ — ​ 25,083 ​ Other equity and related transactions 231 ​ ​ 203 ​ ​ ( 17,390 ) ​ — ​ — ​ ( 17,187 ) ​ Balances, May 5, 2023 219,336 ​ $ 191,921 ​ $ 3,701,564 ​ $ 2,041,118 ​ $ 648 ​ $ 5,935,251 ​ ​ See notes to condensed consolidated financial statements. ​ 5 ​ DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the 13 weeks ended ​ May 3, May 5, ​ ​ 2024 ​ 2023 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 363,317 ​ $ 514,380 ​ Adjustments to reconcile net income to net cash from operating activities: ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 232,286 ​ 201,907 ​ Deferred income taxes ​ 23,876 ​ 50,442 ​ Noncash share-based compensation ​ 21,846 ​ 25,083 ​ Other noncash (gains) and losses ​ 15,052 ​ 28,630 ​ Change in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ Merchandise inventories ​ 49,562 ​ ( 601,138 ) ​ Prepaid expenses and other current assets ​ ( 42,650 ) ​ ( 56,866 ) ​ Accounts payable ​ ( 95,686 ) ​ 116,363 ​ Accrued expenses and other liabilities ​ 14,814 ​ ( 176,804 ) ​ Income taxes ​ 83,797 ​ 86,992 ​ Other ​ ( 2,408 ) ​ 2,126 ​ Net cash provided by (used in) operating activities ​ 663,806 ​ 191,115 ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ Purchases of property and equipment ​ ( 341,975 ) ​ ( 363,141 ) ​ Proceeds from sales of property and equipment ​ 814 ​ 1,539 ​ Net cash provided by (used in) investing activities ​ ( 341,161 ) ​ ( 361,602 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ Repayments of long-term obligations ​ ( 5,205 ) ​ ( 4,505 ) ​ Net increase (decrease) in commercial paper outstanding ​ ​ — ​ ​ 3,068 ​ Borrowings under revolving credit facilities ​ — ​ 500,000 ​ Repayments of borrowings under revolving credit facilities ​ — ​ ( 250,000 ) ​ Payments of cash dividends ​ ​ ( 129,736 ) ​ ​ ( 129,401 ) ​ Other equity and related transactions ​ ( 4,287 ) ​ ( 17,187 ) ​ Net cash provided by (used in) financing activities ​ ( 139,228 ) ​ 101,975 ​ Net increase (decrease) in cash and cash equivalents ​ 183,417 ​ ( 68,512 ) ​ Cash and cash equivalents, beginning of period ​ 537,283 ​ 381,576 ​ Cash and cash equivalents, end of period ​ $ 720,700 ​ $ 313,064 ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental noncash investing and financing activities: ​ ​ ​ ​ ​ ​ ​ Right of use assets obtained in exchange for new operating lease liabilities ​ $ 404,716 ​ $ 386,055 ​ Purchases of property and equipment awaiting processing for payment, included in Accounts payable ​ $ 128,936 ​ $ 160,510 ​ ​ See notes to condensed consolidated financial statements. ​ ​ 6 ​ DOLLAR GENERAL CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) ​ 1. Basis of presentation ​ The accompanying unaudited condensed consolidated financial statements of Dollar General Corporation (which individually or together with its subsidiaries, as the context requires, is referred to as the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and Rule 10-01 of Regulation S-X. Such financial statements consequently do not include all of the disclosures normally required by U.S. GAAP for annual financial statements or those normally made in the Company’s Annual Report on Form 10-K, including the condensed consolidated balance sheet as of February 2, 2024, which was derived from the audited consolidated financial statements at that date. Accordingly, readers of this Quarterly Report on Form 10-Q should refer to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2024 for additional information. ​ The Company’s fiscal year ends on the Friday closest to January 31. Unless the context requires otherwise, references to years contained herein pertain to the Company’s fiscal year. The Company’s 2024 fiscal year is scheduled to be a 52 -week accounting period ending on January 31, 2025, and the 2023 fiscal year was a 52 -week accounting period that ended on February 2, 2024. ​ The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the Company’s customary accounting practices. In management’s opinion, all adjustments (which are of a normal recurring nature) necessary for a fair presentation of the consolidated financial position as of May 3, 2024, and results of operations for the 13-week accounting periods ended May 3, 2024 and May 5, 2023, have been made. ​ The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Because the Company’s business is moderately seasonal, the results for interim periods are not necessarily indicative of the results to be expected for the entire year. ​ The Company uses the last-in, first-out (“LIFO”) method of valuing inventory. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels, sales for the year and the expected rate of inflation or deflation for the year. The interim LIFO calculations are subject to adjustment in the final year-end LIFO inventory valuation. The Company recorded a LIFO provision of $ 10.3 million and $ 28.1 million in the respective 13-week periods ended May 3, 2024 and May 5, 2023. In addition, ongoing estimates of inventory shrinkage and initial markups and markdowns are included in the interim cost of goods sold calculation. ​ We utilize supply chain finance programs whereby qualifying suppliers may elect at their sole discretion to sell our payment obligations to designated third party financial institutions. As of May 3, 2024 and February 2, 2024, the amount of obligations outstanding that the Company has confirmed with the financial institutions under the supply chain finance program were $ 246.6 million and $ 306.8 million, respectively. ​ In December 2023, the Financial Accounting Standards Board (“FASB”) issued an update to the required disclosures for income taxes. The update is intended to improve the rate reconciliation and income taxes paid disclosures to enhance the transparency and decision usefulness of income tax disclosures. The update is effective for fiscal years beginning after December 15, 2024. The Company is currently assessing the impact of the adoption of this required disclosure. ​ In November 2023, the FASB issued an update to the required disclosures for segment reporting. The update is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. The update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company does not expect the adoption of this update to have a material impact on its consolidated results of operations, financial position, or cash flows. 7 ​ ​ In September 2022, the FASB issued new required disclosures for supplier finance programs. These disclosures are intended to enhance the transparency about the use of supplier finance programs for investors. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with the exception of the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023. The Company adopted the required disclosures for this accounting standard update in fiscal 2023, except for the disclosure of rollforward activity, which will be adopted for fiscal year 2024 within the Form 10-K. ​ 2. Earnings per share ​ Earnings per share is computed as follows (in thousands, except per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 13 Weeks Ended May 3, 2024 ​ ​ 13 Weeks Ended May 5, 2023 ​ ​ ​ Weighted ​ ​ Weighted ​ ​ ​ Net ​ Average ​ Per Share ​ ​ Net ​ Average ​ Per Share ​ ​ ​ Income ​ Shares ​ Amount ​ ​ Income ​ Shares ​ Amount ​ Basic earnings per share ​ $ 363,317 219,748 ​ $ 1.65 ​ ​ $ 514,380 219,193 ​ $ 2.35 ​ Effect of dilutive share-based awards ​ ​ ​ 304 ​ ​ ​ ​ ​ ​ ​ 914 ​ ​ ​ ​ Diluted earnings per share ​ $ 363,317 220,052 ​ $ 1.65 ​ ​ $ 514,380 220,107 ​ $ 2.34 ​ ​ Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is determined based on the dilutive effect of share-based awards using the treasury stock method. ​ Share-based awards that were outstanding at the end of the respective periods but were not included in the computation of diluted earnings per share because the effect of exercising such awards would be antidilutive, were approximately 0.1 million in each of the respective 13-week periods ended May 3, 2024 and May 5, 2023. ​ 3. Income taxes ​ Under the accounting standards for income taxes, the asset and liability method is used for computing the future income tax consequences of events that have been recognized in the Company’s consolidated financial statements or income tax returns. ​ Income tax reserves are determined using the methodology established by accounting standards for income taxes which require companies to assess each income tax position taken using the following two-step approach. A determination is first made as to whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the respective tax position. ​ The Company’s 2019 and earlier tax years are not open for further examination by the Internal Revenue Service (“IRS”). The IRS, at its discretion, may choose to examine the Company’s 2020 through 2022 fiscal year income tax filings. The Company has various state income tax examinations that are currently in progress. Generally, with few exceptions, the Company’s 2020 and later tax years remain open for examination by the various state taxing authorities. ​ As of May 3, 2024, the total reserves for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $ 11.7 million, $ 1.4 million and $ 0.8 million, respectively, for a total of $ 13.9 million. The uncertain tax liability is reflected in noncurrent other liabilities in the condensed consolidated balance sheet. ​ The Company’s reserve for uncertain tax positions is expected to be reduced by $ 2.7 million in the coming twelve months as a result of expiring statutes of limitations or settlements. As of May 3, 2024, approximately $ 11.7 million of the reserve for uncertain tax positions would impact the Company’s effective income tax rate if the Company were to recognize the tax benefit for these positions. ​ 8 ​ The effective income tax rate for the 13-week period ended May 3, 2024 was 23.3 % compared to a rate of 21.8 % for the 13-week period ended May 5, 2023. The effective income tax rate was higher for the 13-week period in 2024 than the comparable 13-week period in 2023 primarily due to the effect of certain rate-impacting items on lower earnings before taxes and expense attributable to stock-based compensation. ​ The Organization of Economic Cooperation and Development has proposed a global minimum tax of 15% on a country-by-country basis (“Pillar Two”). Pursuant to Pillar Two, countries have enacted minimum tax rates of 15% effective for the 2024 tax year while other countries have enacted or proposed legislation making the 15% minimum tax rate effective for the 2025 tax year or later. The Company operates in a country that is currently assessing the enactment of the 15% minimum tax rate beginning in 2025. If enacted, the Company does not believe it will have a material impact on tax expense. ​ 4. Leases ​ As of May 3, 2024, the Company’s primary leasing activities were real estate leases for most of its retail store locations and certain of its distribution facilities. Substantially all of the Company’s leases are classified as operating leases, and the associated assets and liabilities are presented as separate captions in the condensed consolidated balance sheets. Finance lease assets are included in net property and equipment, and finance lease liabilities are included in long-term obligations, in the condensed consolidated balance sheets. At May 3, 2024, the weighted-average remaining lease term for the Company’s operating leases was 9.5 years, and the weighted average discount rate for such leases was 4.3 %. Operating lease costs are reflected as selling, general and administrative costs in the condensed consolidated statements of income. For the 13-week periods ended May 3, 2024 and May 5, 2023, such costs were $ 459.8 million and $ 424.6 million, respectively. Cash paid for amounts included in the measurement of operating lease liabilities of $ 466.7 million and $ 426.3 million, respectively, were reflected in cash flows from operating activities in the condensed consolidated statements of cash flows for the 13-week periods ended May 3, 2024 and May 5, 2023. ​ 5. Current and long-term obligations ​ Current and long-term obligations consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ May 3, February 2, (In thousands) ​ 2024 ​ 2024 Revolving Facility ​ $ — ​ $ — ​ 364-Day Revolving Facility ​ ​ — ​ ​ — ​ Unsecured commercial paper notes ​ ​ — ​ ​ — ​ 4.250 % Senior Notes due September 20, 2024 (net of discount of $ 145 and $ 230 ) ​ ​ 749,855 ​ ​ 749,770 ​ 4.150 % Senior Notes due November 1, 2025 (net of discount of $ 139 and $ 162 ) ​ ​ 499,861 ​ ​ 499,838 ​ 3.875 % Senior Notes due April 15, 2027 (net of discount of $ 148 and $ 160 ) ​ ​ 599,852 ​ ​ 599,840 ​ 4.625 % Senior Notes due November 1, 2027 (net of discount of $ 376 and $ 400 ) ​ ​ 549,624 ​ ​ 549,600 ​ 4.125 % Senior Notes due May 1, 2028 (net of discount of $ 224 and $ 237 ) ​ ​ 499,776 ​ ​ 499,763 ​ 5.200 % Senior Notes due July 5, 2028 (net of discount of $ 118 and $ 124 ) ​ ​ 499,882 ​ ​ 499,876 ​ 3.500 % Senior Notes due April 3, 2030 (net of discount of $ 425 and $ 441 ) ​ ​ 944,621 ​ ​ 951,240 ​ 5.000 % Senior Notes due November 1, 2032 (net of discount of $ 2,106 and $ 2,155 ) ​ ​ 697,894 ​ ​ 697,845 ​ 5.450 % Senior Notes due July 5, 2033 (net of discount of $ 1,490 and $ 1,521 ) ​ ​ 998,510 ​ ​ 998,479 ​ 4.125 % Senior Notes due April 3, 2050 (net of discount of $ 4,646 and $ 4,670 ) ​ ​ 495,354 ​ ​ 495,330 ​ 5.500 % Senior Notes due November 1, 2052 (net of discount of $ 287 and $ 288 ) ​ ​ 299,713 ​ ​ 299,712 ​ Other ​ ​ 196,254 ​ ​ 200,418 ​ Debt issuance costs, net ​ ( 39,670 ) ​ ( 41,527 ) ​ ​ ​ $ 6,991,526 ​ $ 7,000,184 ​ Less: current portion ​ ( 769,139 ) ​ ( 768,645 ) ​ Long-term obligations ​ $ 6,222,387 ​ $ 6,231,539 ​ ​ Revolving Facility ​ At May 3, 2024, the existing senior unsecured revolving credit facility (the “Revolving Facility”) had a commitment of $ 2.0 billion that provides for the issuance of letters of credit up to $ 100.0 million and is scheduled to mature on December 2, 2026. 9 ​ ​ Borrowings under the Revolving Facility bear interest at a rate equal to an applicable interest rate margin plus, at the Company’s option, either (a) Adjusted Term SOFR (which is Term SOFR (as published by CME Group Benchmark Administration Limited) plus a credit spread adjustment of 0.10 %) or (b) a base rate (which is usually equal to the prime rate). The applicable interest rate margin for borrowings as of May 3, 2024 was 1.015 % for Adjusted Term SOFR borrowings and 0.015 % for base-rate borrowings. The Company is also required to pay a facility fee, payable on any used and unused commitment amounts of the Revolving Facility, and customary fees on letters of credit issued under the Revolving Facility. As of May 3, 2024, the facility fee rate was 0.11 %. The applicable interest rate margins for borrowings, the facility fees and the letter of credit fees under the Revolving Facility are subject to adjustment from time to time based on the Company’s long-term senior unsecured debt ratings. ​ The credit agreement governing the Revolving Facility contains a number of customary affirmative and negative covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to: incur additional liens; sell all or substantially all of the Company’s assets; consummate certain fundamental changes or change in the Company’s lines of business; and incur additional subsidiary indebtedness. The credit agreement governing the Revolving Facility also contains financial covenants which require the maintenance of a minimum fixed charge coverage ratio and a maximum leverage ratio. On February 13, 2024, the Company amended the credit agreement governing the Revolving Facility to increase the maximum leverage ratio for the four quarters of fiscal 2024. As of May 3, 2024, the Company was in compliance with all covenants pertaining to the Revolving Facility. The credit agreement governing the Revolving Facility also contains customary events of default. ​ As of May 3, 2024, the Company had no outstanding borrowings, no outstanding letters of credit, and approximately $ 2.0 billion of borrowing availability under the Revolving Facility that, due to the Company’s intention to maintain borrowing availability related to the commercial paper program described below, could contribute incremental liquidity of $ 1.8 billion . In addition, as of May 3, 2024, the Company had outstanding letters of credit of $ 46.6 million which were issued pursuant to separate agreements. ​ 364-Day Revolving Facility ​ The Company had a 364-day $ 750 million unsecured revolving credit facility (the “364-Day Revolving Facility”) which expired on January 30, 2024. ​ Commercial Paper ​ As of May 3, 2024, the Company had a commercial paper program under which the Company may issue unsecured commercial paper notes (the “CP Notes”) from time to time in an aggregate amount not to exceed $ 2.0 billion outstanding at any time. The CP Notes may have maturities of up to 364 days from the date of issue and rank equal in right of payment with all of the Company’s other unsecured and unsubordinated indebtedness. The Company intends to maintain available commitments under the Revolving Facility in an amount at least equal to the amount of CP Notes outstanding at any time. As of May 3, 2024, the Company’s condensed consolidated balance sheet reflected no outstanding unsecured CP Notes. CP Notes totaling $ 195.0 million and $ 197.7 million at May 3, 2024 and February 2, 2024, respectively, were held by a wholly-owned subsidiary of the Company and are therefore not reflected in the condensed consolidated balance sheets. ​ Senior Notes ​ On June 7, 2023, the Company issued $ 500.0 million aggregate principal amount of 5.20 % senior notes due 2028 (the “July 2028 Senior Notes”), net of discount of $ 0.1 million, and $ 1.0 billion aggregate principal amount of 5.45 % senior notes due 2033 (the “2033 Senior Notes”), net of discount of $ 1.6 million. The July 2028 Senior Notes are scheduled to mature on July 5, 2028, and the 2033 Senior Notes are scheduled to mature on July 5, 2033. Interest on the July 2028 Senior Notes and the 2033 Senior Notes is payable in cash on January 5 and July 5 of each year. The Company incurred $ 12.4 million of debt issuance costs associated with the issuance of the July 2028 Senior Notes and the 2033 Senior Notes. ​ 10 ​ 6. Assets and liabilities measured at fair value ​ Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, fair value accounting standards establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The Company does not have any fair value measurements categorized within Level 3 as of May 3, 2024. ​ The following table presents the Company’s liabilities required to be measured at fair value as of May 3, 2024, aggregated by the level in the fair value hierarchy within which those measurements are classified. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ ​ in Active ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Markets ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ ​ for Identical ​ Other ​ Significant ​ Total Fair ​ ​ ​ Assets and ​ Observable ​ Unobservable ​ Value at ​ ​ ​ Liabilities ​ Inputs ​ Inputs ​ May 3, ​ (In thousands) ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ 2024 ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current and long-term obligations (a) ​ $ 6,553,588 ​ $ 196,254 ​ $ — ​ $ 6,749,842 ​ Deferred compensation (b) ​ 44,729 ​ — ​ — ​ 44,729 ​ (a) Included in the condensed consolidated balance sheet at book value as current portion of long-term obligations of $ 769,139 and long-term obligations of $ 6,222,387 . (b) Reflected at fair value in the condensed consolidated balance sheet as accrued expenses and other current liabilities of $ 3,176 and noncurrent other liabilities of $ 41,553 . ​ 7. Commitments and contingencies Legal proceedings ​ From time to time, the Company is a party to various legal matters in the ordinary course of its business, including actions by employees, consumers, suppliers, government agencies, or others. The Company has recorded accruals with respect to these matters, where appropriate, which are reflected in the Company’s condensed consolidated financial statements. For some matters, a liability is not probable or the amount cannot be reasonably estimated and therefore an accrual has not been made. ​ On November 27, 2023, and November 30, 2023, respectively, the following putative shareholder class action lawsuits were filed in the United States District Court for the Middle District of Tennessee in which the plaintiffs allege that during the putative class periods noted below, the Company and certain of its current and former officers violated the federal securities laws by misrepresenting the impact of alleged store labor, inventory, pricing and other practices on the Company’s financial results and prospects: Washtenaw County Employees’ Retirement System v. Dollar General Corporation, et al. (Case No. 3:23-cv-01250) (putative class period of May 28, 2020 to August 30, 2023) ( “Washtenaw County” ); Robert J. Edmonds v. Dollar General Corporation, et al. (Case No. 3:23-cv-01259) (putative class period of February 23, 2023 to August 31, 2023) ( “Edmonds” ) (collectively, the “Shareholder Securities Litigation” ). The plaintiffs seek compensatory damages, equitable/injunctive relief, pre- and post-judgment interest and attorneys’ fees and costs. The Edmonds matter was voluntarily dismissed on January 19, 2024. On April 4, 2024, the court appointed lead plaintiff and lead counsel in the Shareholder Securities Litigation . On or before June 17, 2024, lead plaintiff must file a consolidated amended complaint. ​ At this time, it is not possible to estimate the value of the claims asserted in the Shareholder Securities Litigation or the potential range of loss in this matter, and no assurances can be given that the Company will be successful in its defense on the merits or otherwise. However, if the Company is not successful in its defense efforts, the resolution of the Shareholder Securities Litigation could have a material adverse effect on the Company’s consolidated financial statements as a whole. 11 ​ ​ On January 26 and 29, 2024, and February 1, 2024, respectively, the following shareholder derivative actions were filed in the United States District Court for the Middle District of Tennessee in which the plaintiff shareholders, purportedly on behalf and for the benefit of the Company, allege that certain of the Company’s current and former officers and directors (i) violated their fiduciary duties by misrepresenting the impact of alleged store labor, inventory pricing, and other practices on the Company’s financial results, prospects, and reputation, as well as creating a risk of adverse regulatory action; (ii) wasted corporate assets; and (iii) were unjustly enriched: Nathan Silva v. Todd J. Vasos, et. al. (Case No. 3:24-cv-00083) ( “Silva” ); Terry Dunn v. Todd J. Vasos, et. al. (Case No. 3:24-cv-00093) ( “Dunn” ); Kathryn A. Caliguiri Inh Ira Bene Of Catherine Sugarbaker v. Todd J. Vasos, et. al. (Case No. 3:24-cv-00117) ( “Caliguiri” ) (collectively, the “Federal Court Shareholder Derivative Litigation” ). The Silva complaint also alleges certain of the Company’s current and former officers and directors violated federal securities laws and aided and abetted breach of fiduciary duty and that Mr. Vasos violated his fiduciary duties by misusing material, non-public information. The Dunn and Caliguiri complaints additionally allege that certain of the Company’s officers and directors violated their fiduciary duties by recklessly or negligently disregarding workplace safety practices, and that Mr. Vasos, Mr. Garratt and Ms. Fili-Krushel violated their fiduciary duties by misusing material, non-public information. The plaintiffs in the Federal Court Shareholder Derivative Litigation seek both non-monetary and monetary relief for the benefit of the Company. On April 2, 2024, the court consolidated the Silva , Dunn , and Caliguiri actions. On May 2, 2024, the Silva action was dismissed. On May 22, 2024, the court entered an order staying the Dunn and Caliguiri actions pending resolution of the defendants’ anticipated motion to dismiss in the Shareholder Securities Litigation . ​ On March 26, 2024 and March 28, 2024, respectively, the following shareholder derivative actions were filed in the Chancery Court for Davidson County, Tennessee: Todd Hellrigel v. Todd J. Vasos et al. (Case No. 24-0392-I) ( “Hellrigel" ); Steve Southwell v. Todd Vasos, et al. (Case No. 24-0379-I) ( “Southwell” ) (collectively, the “State Court Shareholder Derivative Litigation” ). The claims in the State Court Shareholder Derivative Litigation include allegations that certain of the Company’s current and former officers and directors (i) violated their fiduciary duties by misrepresenting the impact of alleged store labor, inventory pricing and other practices on the Company’s financial results, prospects, and reputation, as well as creating a risk of adverse regulatory action; (ii) were unjustly enriched; and (iii) that Mr. Vasos, Mr. Garratt, Mr. Bryant, and Ms. Fili-Krushel violated their fiduciary duties by misusing material, non-public information. The relief sought is substantially the same as the relief sought in the Federal Court Derivative Shareholder Litigation . On May 20, 2024, the court entered an agreed order consolidating the Hellrigel and Southwell actions, appointing lead counsel, and staying the State Court Shareholder Derivative Litigation pending resolution of defendants’ anticipated motion to dismiss the Shareholder Securities Litigation . ​ Based on information currently available, the Company believes that its pending legal matters, both individually and in the aggregate, will be resolved without a material adverse effect on the Company’s consolidated financial statements as a whole. However, litigation and other legal matters involve an element of uncertainty. Adverse decisions and settlements, including any required changes to the Company’s business, or other developments in such matters could affect the consolidated operating results in future periods or result in liability or other amounts material to the Company’s annual consolidated financial statements. ​ 8. Segment reporting ​ The Company manages its business on the basis of one reportable operating segment. As of May 3, 2024, the Company’s retail store operations were primarily located within the United States, with three retail stores in Mexico. Certain product sourcing and other operations are located outside the United States, which collectively are not material with regard to assets, results of operations or otherwise to the consolidated financial statements. The following net sales data is presented in accordance with accounting standards related to disclosures about segments of an enterprise. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 13 Weeks Ended ​ ​ ​ May 3, ​ May 5, ​ (in thousands) 2024 ​ 2023 Classes of similar products: ​ ​ ​ ​ ​ ​ ​ Consumables ​ $ 8,210,850 ​ $ 7,582,882 ​ Seasonal ​ 963,514 ​ 962,681 ​ Home products ​ 478,791 ​ 531,189 ​ Apparel ​ 260,866 ​ 266,080 ​ Net sales ​ $ 9,914,021 ​ $ 9,342,832 ​ ​ ​ 12 ​ 9. Common stock transactions ​ On August 29, 2012, the Company’s Board of Directors (the “Board”) authorized a common stock repurchase program, which the Board has since increased on several occasions. On August 24, 2022, the Board authorized a $ 2.0 billion increase to the existing common stock repurchase program, bringing the cumulative total to $ 16.0 billion authorized under the program since its inception in 2012. The repurchase authorization has no expiration date and allows repurchases from time to time in open market transactions, including pursuant to trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, or in privately negotiated transactions. The timing, manner and number of shares repurchased will depend on a variety of factors, including price, market conditions, compliance with the covenants and restrictions under the Company’s debt agreements, cash requirements, excess debt capacity, results of operations, financial condition and other factors. Repurchases under the program may be funded from available cash or borrowings, including under the Revolving Facility and issuance of CP Notes discussed in further detail in Note 5, or otherwise. ​ Pursuant to its common stock repurchase program, during the 13-week periods ended May 3, 2024 and May 5, 2023, respectively, the Company repurchased no shares of its common stock in the open market. ​ The Company paid a cash dividend of $ 0.59 per share during the first quarter of 2024. In May 2024, the Board declared a quarterly cash dividend of $ 0.59 per share, which is payable on or before July 23, 2024, to shareholders of record on July 9, 2024. The amount and declaration of future cash dividends is subject to the sole discretion of the Board and will depend upon, among other things, the Company’s results of operations, cash requirements, financial condition, contractual restrictions, excess debt capacity, and other factors that the Board may deem relevant in its sole discretion. ​ ​ 13 ​ Report of Independent Registered Public Accounting Firm ​ To the Shareholders and Board of Directors of Dollar General Corporation ​ Results of Review of Interim Financial Statements ​ We have reviewed the accompanying condensed consolidated balance sheet of Dollar General Corporation and subsidiaries (the Company) as of May 3, 2024, the related condensed consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the thirteen -week periods ended May 3, 2024 and May 5, 2023, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles. ​ We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of February 2, 2024, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated March 25, 2024, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of February 2, 2024, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. ​ Basis for Review Results ​ These financial statements are the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. ​ ​ ​ /s/ Ernst & Young LLP ​ ​ Nashville, Tennessee ​ May 30, 2024 ​ ​ ​ ​ 14 ​