DOLLAR GENERAL CORP

Previous wording

We are the largest discount retailer in the United States by number of stores, with 21,055 stores located in 48 U.S. states and Mexico as of May 1, 2026, with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States. We offer a broad selection of merchandise, including consumable products such as food, paper and cleaning products, health and beauty products and pet supplies, and non-consumable products such as seasonal merchandise, home decor and domestics, and basic apparel. Our merchandise includes national brands from leading manufacturers, as well as our own private brand selections with prices often at substantial discounts to national brands. We offer our customers these national brand and private brand products at everyday low prices (typically $10 or less) from our convenient small-box locations.

Current wording

We are the largest discount retailer in the United States by number of stores, with 21,148 stores located in 48 U.S. states and Mexico as of July 31, 2026, with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States. We offer a broad selection of merchandise, including consumable products such as food, paper and cleaning products, health and beauty products and pet supplies, and non-consumable products such as seasonal merchandise, home decor and domestics, and basic apparel. Our merchandise includes national brands from leading manufacturers, as well as our own private brand selections with prices often at substantial discounts to national brands. We offer our customers these national brand and private brand products at everyday low prices (typically $10 or less) from our convenient small-box locations.

Previous wording

Uncertainty remains regarding the potential impact of tariffs on consumer behavior and our business. Tariff rates on both direct imports and domestic purchases did not materially impact our financial results for the first quarter of 2026. The tariff environment remains dynamic, and the specific tariffs applicable to goods imported by us and our suppliers into the U.S. may continue to evolve. Tariff rate increases or expansions of tariff coverage affecting the products that we sell could have a significant impact on our business and on our customers’ budgets. We continue to monitor developments and will evaluate the impact of any tariff rate changes on our business and take action to mitigate such impact. There can be no assurance we will be successful in our efforts, or that price increases, if they become necessary, will not adversely affect customer behavior. Following the February 20, 2026 decision by the United States Supreme Court invalidating certain tariffs imposed under the International Emergency Economic Powers Act, we submitted claims with U.S. Customs and Border Protection seeking refunds for such tariffs that we previously paid. The exact timing and amount of refunds remain subject to uncertainty.

Current wording

Uncertainty remains regarding the potential impact of tariffs on consumer behavior and our business. Tariff rates on both direct imports and domestic purchases did not materially impact our financial results for the second quarter of 2026. The tariff environment remains dynamic, and the specific tariffs applicable to goods imported by us and our suppliers into the U.S. may continue to evolve. Tariff rate increases or expansions of tariff coverage affecting the products that we sell could have a significant impact on our business and on our customers’ budgets. We continue to monitor developments and will evaluate the impact of any tariff rate changes on our business and take action to mitigate such impact. There can be no assurance we will be successful in our efforts, or that pricing actions, including any future price increases, will not adversely affect customer behavior. During the second quarter of 2026, we began receiving cash refunds related to IEEPA tariffs that we had previously paid. We received the majority of the expected refunds during the quarter and reinvested a substantial portion of the refunds in our customer value proposition through targeted promotional activities and lower everyday prices.

Previous wording

We seek to drive profitable sales growth through initiatives aimed at increasing customer traffic and average transaction amount. Historically, sales in our consumables category, which tend to have lower gross margins, have been key drivers of net sales and customer traffic, while sales in our non-consumables categories, which tend to have higher gross margins, have been key drivers of more profitable sales growth and average transaction amount. Our sales mix remains heavily weighted towards consumables, although non-consumables have outpaced consumables in same-store sales growth for the last five consecutive quarters. Certain of our initiatives are intended to better optimize our sales mix; however, there can be no assurances that these efforts will be successful.

Current wording

We seek to drive profitable sales growth through initiatives aimed at increasing customer traffic and average transaction amount. Historically, sales in our consumables category, which tend to have lower gross margins, have been key drivers of net sales and customer traffic, while sales in our non-consumables categories, which tend to have higher gross margins, have been key drivers of more profitable sales growth and average transaction amount. Our sales mix remains heavily weighted towards consumables, although non-consumables have outpaced consumables in same-store sales growth for the last six consecutive quarters. Certain of our initiatives are intended to better optimize our sales mix; however, there can be no assurances that these efforts will be successful.

Previous wording

Inventory shrink has significantly improved from elevated levels in recent years, and although damages remain elevated, we have made progress reducing damages for the last five consecutive quarters. We continue to implement actions designed to drive sustained improvement in both shrink and damages.

Current wording

Inventory shrink has significantly improved from elevated levels in recent years, and although damages remain elevated, we made progress reducing damages in the second quarter of 2026. We continue to implement actions designed to drive sustained improvement in both shrink and damages.

Previous wording

We also remain focused on capturing growth opportunities. In 2026, we plan to open approximately 450 new stores (as well as approximately 10 stores in Mexico), remodel approximately 2,000 stores through Project Renovate, remodel approximately 2,250 stores through Project Elevate, and relocate approximately 20 stores, for a total of 4,730 real estate projects. As part of this plan, in the first quarter of 2026 we opened a total of 195 new stores, including 5 stores in Mexico, remodeled 659 stores through Project Renovate and 711 stores through Project Elevate, relocated 6 stores and closed 33 stores.

Current wording

We also remain focused on capturing growth opportunities. In 2026, we plan to open approximately 450 new stores (as well as approximately 10 stores in Mexico), remodel approximately 2,000 stores through Project Renovate, remodel approximately 2,250 stores through Project Elevate, and relocate approximately 20 stores, for a total of 4,730 real estate projects. As part of this plan, in the second quarter of 2026 we opened a total of 126 new stores, including 1 store in Mexico, remodeled 665 stores through Project Renovate and 711 stores through Project Elevate, relocated 5 stores and closed 33 stores.

Previous wording

Finally, pOpshelf, our unique retail concept focused on categories such as seasonal and home décor, health and beauty, home cleaning supplies, and party and entertainment goods, represents an additional potential growth opportunity. At the end of the first quarter of 2026, we operated 180 standalone pOpshelf stores. We continue to take focused actions designed to improve the performance of pOpshelf stores, although there can be no assurances that our efforts will be successful.

Current wording

Finally, pOpshelf, our unique retail concept focused on categories such as seasonal and home décor, health and beauty, home cleaning supplies, and party and entertainment goods, represents an additional potential growth opportunity. At the end of the second quarter of 2026, we operated 179 standalone pOpshelf stores. We continue to take focused actions designed to improve the performance of pOpshelf stores, although there can be no assurances that our efforts will be successful.

Previous wording

We believe ongoing inflationary pressures could continue to affect our vendors and customers and our operating results. Both inflation and higher interest rates have significantly increased new store opening costs and occupancy costs in recent years and, while new store returns remain strong, these increased costs have negatively impacted our projected new store returns and influenced our new store growth plans. Furthermore, we incurred significantly higher fuel costs in the first quarter of 2026, and we expect this trend to continue for an uncertain duration.

Current wording

We believe ongoing inflationary pressures could continue to affect our vendors and customers and our operating results. Both inflation and higher interest rates have significantly increased new store opening costs and occupancy costs in recent years and, while new store returns remain strong, these increased costs have negatively impacted our projected new store returns and influenced our new store growth plans. Furthermore, we incurred significantly higher fuel costs in the second quarter of 2026, and we expect this trend to continue for an uncertain duration.

Previous wording

Accounting Periods. We utilize a 52-53 week fiscal year convention that ends on the Friday nearest to January 31. The following text contains references to years 2026 and 2025, which represent the 52-week fiscal years ending or ended January 29, 2027 and January 30, 2026, respectively. References to the first quarter accounting periods for 2026 and 2025 contained herein refer to the 13-week accounting periods ended May 1, 2026 and May 2, 2025, respectively.

Current wording

Accounting Periods. We utilize a 52-53 week fiscal year convention that ends on the Friday nearest to January 31. The following text contains references to years 2026 and 2025, which represent the 52-week fiscal years ending or ended January 29, 2027 and January 30, 2026, respectively. References to the second quarter accounting periods for 2026 and 2025 contained herein refer to the 13-week accounting periods ended July 31, 2026 and August 1, 2025, respectively.

Previous wording

The following tables contain results of operations data for the first 13-week periods of 2026 and 2025, and the dollar and percentage variances among those periods. Basis point amounts referred to below are equal to 0.01% as a percentage of net sales:

Current wording

The following tables contain results of operations data for the second 13-week periods and the 26-week periods of 2026 and 2025, and the dollar and percentage variances among those periods. Basis point amounts referred to below are equal to 0.01% as a percentage of net sales:

Previous wording

Net Sales. For the 2026 period, net sales increased 3.4% to $10.79 billion. The net sales increase in the 2026 period was primarily due to sales from new stores and a same-store sales increase of 2.0% compared to the 2025 period, partially offset by the impact of store closures. The increase in same-store sales reflects a 1.4% increase in customer traffic and a 0.5% increase in average transaction amount. The increase in average transaction amount was driven by higher average retail prices offset by a decrease in items per transaction. Same-store sales increased in the consumables, seasonal, apparel and home products categories. For the 2026 period, there were 20,339 same-stores, which accounted for sales of $10.50 billion.

Current wording

Net Sales. For the 2026 period, net sales increased 5.2% to $11.29 billion. The net sales increase in the 2026 period was primarily due to a same-store sales increase of 3.5% compared to the 2025 period and sales from new stores, partially offset by the impact of store closures. The increase in same-store sales reflects a 2.0% increase in customer traffic and a 1.5% increase in average transaction amount. The increase in average transaction amount was driven by higher average retail prices partially offset by a decrease in items per transaction. Same-store sales increased in the consumables, seasonal, home products, and apparel categories. For the 2026 period, there were 20,476 same-stores, which accounted for sales of $11.00 billion.

Previous wording

Interest Expense, net. Interest expense, net decreased by $17.4 million to $47.2 million in the 2026 period primarily due to lower average outstanding borrowings.

Current wording

Interest Expense, net. Interest expense, net decreased by $14.8 million to $42.9 million in the 2026 period primarily due to lower average outstanding borrowings.

Previous wording

Gross Profit. For the 2026 period, gross profit increased by 5.5%, and as a percentage of net sales increased by 65 basis points to 31.6%, compared to the 2025 period. The increase in the gross profit rate was driven primarily by higher inventory markups, and lower shrink and damages, partially offset by increased markdowns and transportation costs.

Current wording

Gross Profit. For the 2026 period, gross profit increased by 7.6%, and as a percentage of net sales increased by 97 basis points to 32.1%, compared to the 2025 period. The increase in the gross profit rate was driven primarily by tariff refunds, higher inventory markups, a lower LIFO provision, lower inventory damages and lower shrink, partially offset by increased markdowns and increased transportation costs. We estimate the gross profit benefit of tariff refunds after related reinvestments, primarily through promotional and permanent markdowns, was approximately 41 basis points.

Previous wording

*Selling, General & Administrative**Expenses (“SG&A”).*SG&A was 25.7% as a percentage of net sales in the 2026 period compared to 25.4% in the comparable 2025 period, an increase of 25 basis points. The primary expenses that were a higher percentage of net sales in the current year period were depreciation and amortization, utilities, and property taxes, partially offset by lower incentive compensation.

Current wording

Selling, General & Administrative Expenses. SG&A was 25.7% as a percentage of net sales in the 2026 period compared to 25.6% in the comparable 2025 period, an increase of 13 basis points. The primary expense that was a higher percentage of net sales in the current year period was depreciation and amortization, partially offset by lower incentive compensation.

Previous wording

*Income Taxes.*The effective income tax rate for the 2026 period was 24.9% compared to a rate of 23.4% for the 2025 period. The tax rate for the 2026 period was higher than the comparable 2025 period primarily due to expired federal tax credits, partially offset by decreased expense from stock-based compensation.

Current wording

Income Taxes. The effective income tax rate for the 2026 period was 24.5% compared to a rate of 23.4% for the 2025 period. The tax rate for the 2026 period was higher than the comparable 2025 period primarily due to expired federal tax credits, partially offset by a reduced state effective tax rate.

Previous wording

We believe our cash flow from operations and existing cash balances, combined with availability under the unsecured revolving credit facility (the “Revolving Facility”), the unsecured commercial paper notes (the “CP Notes”) and access to the debt markets, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, capital spending, and anticipated dividend payments for a period that includes the next twelve months as well as the next several years. However, our ability to maintain sufficient liquidity may be affected by numerous factors, many of which are outside of our control. Depending on our liquidity levels, conditions in the capital markets and other factors, we may from time to time consider the issuance of debt, equity or other securities, the proceeds of which could provide additional liquidity for our operations. All of our material borrowing arrangements are described in greater detail in Note 5 to the unaudited consolidated financial statements.

Current wording

We believe our cash flow from operations and existing cash balances, combined with availability under the unsecured revolving credit facility (the “Revolving Facility”), the unsecured commercial paper notes (the “CP Notes”) and access to the debt markets, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, capital spending, and anticipated dividend payments and share repurchases for a period that includes the next twelve months as well as the next several years. However, our ability to maintain sufficient liquidity may be affected by numerous factors, many of which are outside of our control. Depending on our liquidity levels, conditions in the capital markets and other factors, we may from time to time consider the issuance of debt, equity or other securities, the proceeds of which could provide additional liquidity for our operations. All of our material borrowing arrangements are described in greater detail in Note 5 to the unaudited consolidated financial statements.

Previous wording

Our inventory balance represented approximately 44% of our total assets, exclusive of operating lease assets, goodwill and other intangible assets, as of May 1, 2026. Our ability to effectively manage our inventory balances can have a significant impact on our cash flows from operations during a given fiscal year, as discussed below. Inventory purchases are often somewhat seasonal in nature, such as the purchase of warm-weather or Christmas-related merchandise. Efficient management of our inventory has been and continues to be an area of focus for us.

Current wording

Our inventory balance represented approximately 42% of our total assets, exclusive of operating lease assets, goodwill and other intangible assets, as of July 31, 2026. Our ability to effectively manage our inventory balances can have a significant impact on our cash flows from operations during a given fiscal year, as discussed under “Changes in Cash Flows” below. Inventory purchases are often somewhat seasonal in nature, such as the purchase of warm-weather or Christmas-related merchandise. Efficient management of our inventory has been and continues to be an area of focus for us.

Previous wording

Our current credit ratings, as well as future rating agency actions, could (i) impact our ability to finance our operations on satisfactory terms; (ii) affect our financing costs; and (iii) affect our insurance premiums and collateral requirements necessary for our self-insured programs. There can be no assurance that we will maintain or improve our current credit ratings, particularly, if we are unable to lower our leverage ratios to levels and within time frames deemed acceptable to the rating agencies. The credit ratings for our borrowings are as follows:

Current wording

Our current credit ratings, as well as future rating agency actions, could (i) impact our ability to finance our operations on satisfactory terms; (ii) affect our financing costs; and (iii) affect our insurance premiums and collateral requirements necessary for our self-insured programs. There can be no assurance that we will maintain or improve our current credit ratings, particularly, if we are unable to maintain or improve our financial ratios to levels deemed acceptable to the rating agencies. The credit ratings for our borrowings are as follows:

Previous wording

Unless otherwise noted, all references to the 2026 and 2025 periods in the discussion of cash flows from operating, investing and financing activities below refer to the 13-week periods ended May 1, 2026 and May 2, 2025, respectively.* *

Current wording

Unless otherwise noted, all references to the 2026 and 2025 periods in the discussion of cash flows from operating, investing and financing activities below refer to the 26-week periods ended July 31, 2026 and August 1, 2025, respectively.* *

Previous wording

*Cash flows from operating activities.*Cash flows from operating activities were $0.7 billion in the 2026 period, which represents a $131.0 million decrease compared to the 2025 period. Net income increased $52.2 million in the 2026 period compared to the 2025 period. Changes in accounts payable resulted in a $293.5 million increase in the 2026 period compared to a $35.1 million decrease in the 2025 period, due primarily to the timing of inventory receipts and related payments. Changes in merchandise inventories resulted in a $308.1 million decrease in the 2026 period as compared to an increase of $124.8 million in the 2025 period as further discussed below. Changes in accrued expenses resulted in a $113.5 million decrease in the 2026 period compared to a $3.0 million decrease in the 2025 period, due primarily to the timing of accruals and payments for incentive compensation and interest. Changes in income taxes in the 2026 period compared to the 2025 period are primarily due to the amount of income tax accrued and timing of payments.

Current wording

*Cash flows from operating activities.*Cash flows from operating activities were $1.5 billion in the 2026 period, which represents a $318.2 million decrease compared to the 2025 period. Net income increased $191.1 million in the 2026 period compared to the 2025 period. Changes in accounts payable resulted in a $275.5 million increase in the 2026 period compared to a $111.2 million increase in the 2025 period, due primarily to the timing of inventory receipts and related payments. Changes in merchandise inventories resulted in a $249.0 million decrease in the 2026 period as compared to an increase of $44.7 million in the 2025 period as further discussed below. Changes in prepaid expenses and other current assets resulted in a $169.4 million decrease in the 2026 period as compared to a decrease of $25.7 million in the 2025 period, due primarily to an increase in vendor receivables. Changes in accrued expenses resulted in a $74.7 million increase in the 2026 period compared to a $167.3 million increase in the 2025 period, due primarily to the timing of accruals and payments for incentive compensation. Changes in income taxes in the 2026 period compared to the 2025 period are primarily due to the amount of income tax accrued and timing of payments.

Previous wording

On an ongoing basis, we closely monitor and manage our inventory balances, which may fluctuate from period to period based on new store openings, the timing of purchases, and other factors. Total merchandise inventories increased 5% in the 2026 period compared to a decrease of 2% in the 2025 period. Percent changes in our four inventory categories for the 2026 period compared to the 2025 period were as follows:

Current wording

On an ongoing basis, we closely monitor and manage our inventory balances, which may fluctuate from period to period based on new store openings, the timing of purchases, and other factors. Total merchandise inventories increased 3% in the 2026 period compared to a decrease of 2% in the 2025 period. Percent changes in our four inventory categories for the 2026 period compared to the 2025 period were as follows:

Previous wording

On a per store basis, inventories at May 1, 2026, decreased by 1.6% compared to the balances at May 2, 2025.

Current wording

On a per store basis, inventories at July 31, 2026, decreased by 2.7% compared to the balances at August 1, 2025.

Previous wording

(a) Remodeled store counts include 659 stores through Project Renovate and 711 stores through Project Elevate.

Current wording

(a) Remodeled store counts include 1,324 stores through Project Renovate and 1,422 stores through Project Elevate.

Previous wording

Capital expenditures for 2026 are currently projected to be approximately $1.4 billion to $1.5 billion. We anticipate funding 2026 capital requirements with a combination of some or all of the following: existing cash balances, cash flows from operations, availability under our Revolving Facility and/or the issuance of additional CP Notes. We plan to continue to invest in store growth and development of new stores and the remodel or relocation of existing stores, including remodeling stores through Project Renovate and Project Elevate. Capital expenditures in 2026 are anticipated to support our store growth as well as our remodel and relocation initiatives, including capital outlays for leasehold improvements, fixtures and equipment; the construction of new stores; costs to support and enhance our supply chain initiatives for existing distribution center facilities and replacement of certain transportation related assets; technology initiatives; as well as routine and ongoing capital requirements.

Current wording

Capital expenditures for 2026 are currently projected to be approximately $1.4 billion to $1.5 billion. We anticipate funding 2026 capital requirements with a combination of some or all of the following: existing cash balances, cash flows from operations, availability under our Revolving Facility and/or the issuance of additional CP Notes. We plan to continue to invest in store growth and development of new stores and the remodel or relocation of existing stores, including remodeling stores through Project Renovate and Project Elevate. Capital expenditures in 2026 are anticipated to support our store growth as well as our remodel and relocation initiatives, including capital outlays for leasehold improvements, fixtures and equipment; the construction of new stores; costs to support and enhance our supply chain

Previous wording

Cash flows from financing activities. During the 2026 and 2025 periods, we paid cash dividends of $130.1 million and $129.8 million, respectively.

Current wording

Cash flows from financing activities. During the 2026 and 2025 periods, we paid cash dividends of $260.3 million and $259.7 million, respectively.

Previous wording

As of May 1, 2026, our common stock repurchase program had a total remaining authorization of approximately $1.38 billion. The authorization 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. Although to preserve our investment grade credit rating and maintain financial flexibility we have not repurchased shares under this program since 2022, it remains an important part of our broader capital allocation strategy, and we anticipate resuming share repurchases at the appropriate time. The repurchase authorization has no expiration date, and future repurchases will depend on a variety of factors, including price, market conditions, compliance with the covenants and restrictions under our debt agreements, cash requirements, excess debt capacity, results of operations, financial condition and other factors. The repurchase program may be modified or terminated from time to time at the discretion of our Board of Directors. For more about our share repurchase program, see Note 9 to the unaudited consolidated financial statements contained in Part I, Item 1 of this report.

Current wording

As of July 31, 2026, our common stock repurchase program had a total remaining authorization of approximately $1.38 billion. The authorization 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. Although to preserve our investment grade credit rating and maintain financial flexibility we have not repurchased shares under this program since 2022, it remains an important part of our broader capital allocation strategy, and we anticipate resuming share repurchases in the second half of fiscal 2026. The repurchase authorization has no expiration date, and future repurchases will depend on a variety of factors, including price, market conditions, compliance with the covenants and restrictions under our debt agreements, cash requirements, excess debt capacity, results of operations, financial condition and other factors. The repurchase program may be modified or terminated from time to time at the discretion of our Board of Directors. For more about our share repurchase program, see Note 9 to the unaudited consolidated financial statements contained in Part I, Item 1 of this report.