Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Dollar General Corp., profitability ratios
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
- Gross Profit Margin
- The gross profit margin exhibited a generally stable pattern over the six-year period. It started at 30.45% in 2019, peaked at 31.76% in 2021, and then moderately declined to 30.29% by 2024. The margin remained close to the 30% mark, suggesting consistent cost management relative to sales revenue.
- Operating Profit Margin
- The operating profit margin demonstrated more volatility. Beginning at 8.26% in 2019, it increased significantly to 10.53% in 2021, indicating improved operational efficiency or cost control. However, after this peak, the margin declined steadily to 6.32% in 2024, reflecting potential increases in operating expenses or pressure on operational profitability in recent years.
- Net Profit Margin
- The net profit margin followed a comparable trajectory to the operating margin but at lower percentages. Starting at 6.2% in 2019, it rose to a high of 7.87% in 2021 before tapering off to 4.29% in 2024. This downward trend after 2021 indicates reduced overall profitability, possibly due to higher expenses, taxes, or other non-operating factors impacting net income.
- Return on Equity (ROE)
- ROE displayed significant fluctuations. It increased from 24.77% in 2019 to a peak of 43.6% in 2023, suggesting periods of strong profitability and effective use of shareholder equity. However, this strong performance was followed by a sharp decline to 24.61% in 2024, indicating a reversal to levels closer to the starting point, which may be attributable to lower net income or changes in equity structure.
- Return on Assets (ROA)
- The ROA showed variability, starting at 12.04% in 2019, dropping significantly to 7.5% in 2020, recovering to 10.27% in 2021, but then declining again to 5.39% in 2024. This declining trend in the latter years suggests less efficient use of assets to generate earnings, consistent with observed reductions in net and operating margins.
Return on Sales
Return on Investment
Gross Profit Margin
Dollar General Corp., gross profit margin calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Gross profit | 11,719,024) | 11,820,098) | 10,813,006) | 10,718,862) | 8,489,061) | 7,803,870) | |
| Net sales | 38,691,609) | 37,844,863) | 34,220,449) | 33,746,839) | 27,753,973) | 25,625,043) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 30.29% | 31.23% | 31.60% | 31.76% | 30.59% | 30.45% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Costco Wholesale Corp. | 10.92% | 10.57% | 10.48% | 11.13% | 11.20% | 11.02% | |
| Target Corp. | 27.54% | 24.57% | 29.28% | 29.27% | 29.76% | — | |
| Walmart Inc. | 23.73% | 23.46% | 24.44% | 24.30% | 24.10% | — | |
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
1 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × 11,719,024 ÷ 38,691,609 = 30.29%
2 Click competitor name to see calculations.
- Gross Profit
- Gross profit demonstrated a generally upward trend over the six-year period, starting at $7,803,870 thousand in 2019 and peaking at $11,820,098 thousand in 2023. There was a slight decline in 2024, with gross profit falling to $11,719,024 thousand. Despite this minor decrease, the overall growth from 2019 to 2024 remains substantial, indicating an expansion in the company's core profitability.
- Net Sales
- Net sales exhibited consistent growth each year, increasing from $25,625,043 thousand in 2019 to $38,691,609 thousand in 2024. This growth reflects a steady increase in revenue-generating activities. The year-over-year sales growth supports the upward movement observed in gross profit, although the growth rate appears to moderate slightly towards the most recent years.
- Gross Profit Margin
- The gross profit margin showed relative stability with minor fluctuations throughout the period. It began at 30.45% in 2019, rose to a peak of 31.76% in 2021, and then gradually declined to 30.29% by 2024. This marginal decrease in margin percentage, despite increasing gross profit in absolute terms, may suggest rising costs of goods sold or pricing pressures impacting profitability at the margin level.
Operating Profit Margin
Dollar General Corp., operating profit margin calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Operating profit | 2,446,300) | 3,328,302) | 3,220,675) | 3,554,765) | 2,302,304) | 2,116,306) | |
| Net sales | 38,691,609) | 37,844,863) | 34,220,449) | 33,746,839) | 27,753,973) | 25,625,043) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 6.32% | 8.79% | 9.41% | 10.53% | 8.30% | 8.26% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Costco Wholesale Corp. | 3.72% | 3.41% | 3.50% | 3.49% | 3.33% | 3.17% | |
| Target Corp. | 5.31% | 3.53% | 8.44% | 6.99% | 5.96% | — | |
| Walmart Inc. | 4.20% | 3.37% | 4.57% | 4.06% | 3.96% | — | |
| Operating Profit Margin, Sector | |||||||
| Consumer Staples Distribution & Retail | 4.20% | 3.40% | 4.76% | 4.26% | 4.03% | — | |
| Operating Profit Margin, Industry | |||||||
| Consumer Staples | 7.96% | 7.31% | 8.44% | 8.48% | 8.17% | — | |
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
1 2024 Calculation
Operating profit margin = 100 × Operating profit ÷ Net sales
= 100 × 2,446,300 ÷ 38,691,609 = 6.32%
2 Click competitor name to see calculations.
- Net Sales
- Net sales have demonstrated a consistent upward trend over the six-year period, increasing from approximately 25.6 billion USD in 2019 to nearly 38.7 billion USD in 2024. This represents a substantial growth, reflecting expansion or increased sales performance year over year.
- Operating Profit
- Operating profit showed growth from 2019 through 2021, reaching a peak of about 3.55 billion USD in 2021. Afterward, there was a decline in 2022, followed by a partial recovery in 2023 and a more pronounced decrease in 2024 to approximately 2.45 billion USD. This fluctuation indicates challenges impacting profitability despite rising net sales.
- Operating Profit Margin
- The operating profit margin increased from 8.26% in 2019, peaking at 10.53% in 2021, which aligns with the peak in operating profit. However, from 2022 onwards, the margin has been on a downward trajectory, dropping to 6.32% in 2024. This decline suggests rising costs or reduced efficiency affecting profitability relative to total sales.
- Overall Observations
- While net sales consistently grew, indicating expanding revenue streams, the operating profit and operating margin trends reveal increasing pressure on profit generation efficiency. The peak profitability year in 2021 followed by a decline suggests that cost management or other operational challenges arose in subsequent years. The sharp decline in operating margin by 2024, despite higher sales, highlights significant margin compression that may require strategic attention.
Net Profit Margin
Dollar General Corp., net profit margin calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 1,661,274) | 2,415,989) | 2,399,232) | 2,655,050) | 1,712,555) | 1,589,472) | |
| Net sales | 38,691,609) | 37,844,863) | 34,220,449) | 33,746,839) | 27,753,973) | 25,625,043) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 4.29% | 6.38% | 7.01% | 7.87% | 6.17% | 6.20% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Costco Wholesale Corp. | 2.95% | 2.65% | 2.62% | 2.61% | 2.45% | 2.45% | |
| Target Corp. | 3.85% | 2.55% | 6.55% | 4.67% | 4.20% | — | |
| Walmart Inc. | 2.41% | 1.93% | 2.41% | 2.43% | 2.86% | — | |
| Net Profit Margin, Sector | |||||||
| Consumer Staples Distribution & Retail | 2.70% | 2.18% | 2.95% | 2.72% | 2.91% | — | |
| Net Profit Margin, Industry | |||||||
| Consumer Staples | 5.69% | 5.47% | 6.11% | 6.21% | 6.22% | — | |
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
1 2024 Calculation
Net profit margin = 100 × Net income ÷ Net sales
= 100 × 1,661,274 ÷ 38,691,609 = 4.29%
2 Click competitor name to see calculations.
The analysis of the financial data over the six-year period reveals several notable trends and shifts in key performance indicators.
- Net Income
- Net income showed a general upward trend from US$1,589,472 thousand in 2019 to a peak of US$2,655,050 thousand in 2021. Following this peak, net income experienced a decline to US$1,661,274 thousand by 2024. This indicates variability in profitability with a significant drop in the most recent fiscal year compared to the high in 2021.
- Net Sales
- Net sales consistently increased each year from US$25,625,043 thousand in 2019 to US$38,691,609 thousand in 2024. This steady growth in sales demonstrates continuous expansion or increased revenue generation capacity over the period under review.
- Net Profit Margin
- The net profit margin exhibited fluctuations, starting at 6.2% in 2019, increasing to a high of 7.87% in 2021, then gradually declining to 4.29% in 2024. This decline in profit margin in recent years suggests that while sales grew, profitability relative to revenues diminished, potentially indicating rising costs or pricing pressures.
Overall, the data indicates robust growth in sales; however, profitability measured by net income and profit margin has shown volatility with a notable downturn in the latest year. This could point to challenges in maintaining cost efficiency or competitive pressures despite increasing revenues.
Return on Equity (ROE)
Dollar General Corp., ROE calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 1,661,274) | 2,415,989) | 2,399,232) | 2,655,050) | 1,712,555) | 1,589,472) | |
| Shareholders’ equity | 6,749,119) | 5,541,772) | 6,261,986) | 6,661,238) | 6,702,500) | 6,417,393) | |
| Profitability Ratio | |||||||
| ROE1 | 24.61% | 43.60% | 38.31% | 39.86% | 25.55% | 24.77% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Costco Wholesale Corp. | 31.19% | 25.11% | 28.31% | 28.51% | 21.89% | 24.00% | |
| Target Corp. | 30.81% | 24.75% | 54.15% | 30.25% | 27.73% | — | |
| Walmart Inc. | 18.50% | 15.23% | 16.42% | 16.69% | 19.93% | — | |
| ROE, Sector | |||||||
| Consumer Staples Distribution & Retail | 22.34% | 18.37% | 22.67% | 20.26% | 21.15% | — | |
| ROE, Industry | |||||||
| Consumer Staples | 32.18% | 30.71% | 32.10% | 31.40% | 30.98% | — | |
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
1 2024 Calculation
ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 1,661,274 ÷ 6,749,119 = 24.61%
2 Click competitor name to see calculations.
The financial data over the given periods reveals several notable trends and fluctuations in key performance indicators.
- Net Income
- Net income initially increased from approximately 1.59 billion USD in early 2019 to a peak of about 2.65 billion USD in early 2021. This was followed by a moderate decline in 2022 to roughly 2.4 billion USD, with a similar level maintained in 2023. However, the most recent data for early 2024 shows a significant drop to approximately 1.66 billion USD, marking a considerable decrease from previous years.
- Shareholders’ Equity
- Shareholders’ equity rose from roughly 6.42 billion USD in early 2019 to a high of approximately 6.7 billion USD in early 2020. It then experienced a slight decrease and fluctuated down to around 5.54 billion USD in early 2023, before rebounding to approximately 6.75 billion USD in early 2024. This pattern indicates some volatility in the equity base, with a notable dip during 2022 and 2023 and partial recovery thereafter.
- Return on Equity (ROE)
- ROE demonstrated an upward trend from 24.77% in 2019 to a peak of 43.6% in early 2023, reflecting increased efficiency in generating profits from shareholders' equity over this period. However, the latest value in early 2024 fell sharply to 24.61%, nearly reversing the gains seen over the previous years and aligning closely with the ROE level observed at the start of the period.
Overall, the company showed strong profitability growth and improved return on equity until early 2023. Yet, in the most recent year, there has been a marked decline in net income and ROE, suggesting challenges in maintaining profitability and efficient equity utilization. Meanwhile, shareholders’ equity trends indicate some volatility, with a recent recovery offsetting prior declines. These dynamics warrant close monitoring to understand the underlying causes and to adjust strategies accordingly.
Return on Assets (ROA)
Dollar General Corp., ROA calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 1,661,274) | 2,415,989) | 2,399,232) | 2,655,050) | 1,712,555) | 1,589,472) | |
| Total assets | 30,795,591) | 29,083,367) | 26,327,371) | 25,862,624) | 22,825,084) | 13,204,038) | |
| Profitability Ratio | |||||||
| ROA1 | 5.39% | 8.31% | 9.11% | 10.27% | 7.50% | 12.04% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Costco Wholesale Corp. | 10.55% | 9.12% | 9.11% | 8.45% | 7.20% | 8.06% | |
| Target Corp. | 7.48% | 5.21% | 12.91% | 8.52% | 7.67% | — | |
| Walmart Inc. | 6.15% | 4.80% | 5.58% | 5.35% | 6.29% | — | |
| ROA, Sector | |||||||
| Consumer Staples Distribution & Retail | 7.15% | 5.68% | 7.29% | 6.30% | 6.62% | — | |
| ROA, Industry | |||||||
| Consumer Staples | 8.89% | 8.28% | 8.95% | 8.75% | 8.24% | — | |
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
1 2024 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 1,661,274 ÷ 30,795,591 = 5.39%
2 Click competitor name to see calculations.
- Net Income
- The net income exhibited a rising trend from 2019 to 2021, increasing from approximately $1.59 billion to about $2.66 billion. However, after 2021, net income showed a declining pattern, falling to roughly $2.42 billion in 2023 and further decreasing significantly to approximately $1.66 billion in 2024.
- Total Assets
- Total assets showed a consistent upward trajectory throughout the years. Starting from about $13.2 billion in 2019, the assets nearly doubled by 2020 to $22.8 billion, continued to increase steadily, reaching over $30.7 billion by 2024. This indicates ongoing expansion or asset accumulation within the company.
- Return on Assets (ROA)
- The ROA percentage saw fluctuations throughout the reported periods. It started at a high of 12.04% in 2019, dropped significantly to 7.5% in 2020, then increased to 10.27% in 2021. Afterward, the ROA experienced a gradual decline, decreasing to 5.39% by 2024. This trend suggests diminishing profitability relative to the asset base over the latter years despite asset growth.
- Overall Analysis
- The data reveals a company that expanded its asset base substantially over the six-year span but faced challenges in maintaining proportional profitability. While net income initially grew in line with asset increases, it declined notably after 2021. Concurrently, the drop in ROA illustrates reduced efficiency in generating income from the enlarged asset base, signaling possible operational or market pressures impacting profitability despite growth in assets.