DG - Dollar General: Headwinds Remain

2024-04-18 12:15:34 ET

Summary

• Dollar General may benefit from the recent bankruptcy of 99 Cents Only stores, and the stock is up over 40% from its late October lows.
• However, headwinds remain for low end retailers and there has been insider selling in April in the shares.
• The company did see an impressive increase in free cash flow in FY2023 despite rising interest expense on its debt.
• What lies ahead for the company in 2024? An analysis follows in the paragraphs below.

Today, we put retailer Dollar General ( DG ) in the spotlight. The company should marginally benefit from the recent bankruptcy of 99 Cents Only which put 371 stores in liquidation and which Dollar General overlaps with nicely. The stock has also rebounded some 40% from its lows in late October during the most recent market downdraft. However, the stock is down slightly over 10% since the company reported Q4 numbers in Mid-March. In addition, headwinds remain for low end retailers and the stock has seen some insider selling here in April. What is the prognosis for Dollar General in the months ahead? An analysis follows below....

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