Dollar General has revealed strategic growth plans for the company over the next two years, including the opening of 900 stores in 2016.
At its 2016 Investor Conference, Dollar General Corp. outlined strategic plans to support the company’s current financial growth model.
Todd Vasos, Dollar General’s CEO, provided an update on key initiatives to support the company’s long-term strategic plans aimed at delivering total annual shareholder returns (earnings per share growth plus dividend yield) of 11% to 17%. Other members of Dollar General’s executive management team also presented at the event. The main areas of discussion were the company’s initiatives to (1) drive profitable sales growth, (2) capture growth opportunities, (3) enhance its position as a low-cost operator and (4) invest in people as a competitive advantage.
“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
Dollar General recently established a financial growth model that is focused on long-term shareholder value creation. Key components of the model include:
| Key Drivers | Annual Target |
| Net Sales | +7-10% |
| – Square Footage | +6-8% |
| – Same-Store Sales | +2-4% |
| Operating Profit | +7-11% |
| Diluted Earnings per Share | +10-15% |
| Cash from Operations | 7-8% of Sales |
| Capital Expenditures | 2-3% of Sales |
| Annual Shareholder Return
(EPS Growth + Dividend Yield) |
+11-17% |
The company plans to open approximately 900 new stores and relocate or remodel 875 stores in fiscal 2016. For fiscal 2017, Dollar General is forecasting approximately 1,000 new stores and relocations or remodels of about 900 stores, in line with its growth model of 6-8% 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 March 10, 2016.
The Investor Conference is available in its entirety through a webcast replay at www.dollargeneral.com under “Investor Information, Conference Calls and Investor Events.”
