- Dollar General reported diluted EPS of $1.05 for 3Q13, compared to $1.06 in 3Q12. Comparable store sales increased 2.9% in 3Q13.
- While consumables sales grew 14.8% due to expansions like food, discretionary categories declined due to economic headwinds. Gross margin decreased to 34.7% from cost pressures.
- The company is focusing on controlling expenses, increasing inventory productivity, and driving operational efficiencies to offset challenges. Dollar General remains committed to investing in its business through new stores, renovations, and leadership.
2. A Word of Caution
Certain statements contained in this presentation which are not historical facts are forward-
looking statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements address the Company’s
plans, activities or events which the Company expects will or may occur in the future.
A number of important factors could cause actual results to differ materially from those
expressed in any forward-looking statements. Such factors, risks and uncertainties are set
forth under the headings “Cautionary Statement Regarding Forward-Looking Statements,” or
“Risk Factors” or "Management’s Discussion and Analysis of Financial Condition and Results
of Operation" in the Company’s annual report on Form 10-K and quarterly reports on Form
10-Q filed or to be filed, respectively, and which are expressly incorporated herein by
reference.
You are cautioned not to place undue reliance on these forward-looking statements, which
speak only as of July 10, 2013. The Company does not undertake to update or revise its
forward-looking statements even if experience or future changes make it clear that projected
results expressed or implied in such statements will not be realized, except as may be
required by law.
2
July 10, 2013
3. Agenda
Introduction & Safe Harbor
Kiley Rawlins, CFA
VP – IR & Communications
3Q13 Highlights
Howard Levine
Chairman & CEO
3Q13 Financial Review and Outlook
Mary Winston
Chief Financial Officer
Operational Update
Mike Bloom
President & COO
Closing Remarks Howard Levine
Questions & Answers
Howard Levine
Mike Bloom
Mary Winston
3
July 10, 2013
5. 3Q13 Highlights
• Diluted EPS of $1.05 vs. $1.06 in 3Q12
• Comparable store sales increase 2.9%
• Market share growth over the last 4, 12, 26
and 52-week periods
5
July 10, 2013
7. Focused on What We Can Control
• Control expenses
• Increase inventory productivity
• Stabilize gross margin
• Drive operational efficiencies
7
July 10, 2013
8. Investing for Our Future
• Assortment
• 500 new stores in FY13
• 60% of stores renovated by end of FY13
• Management team
8
July 10, 2013
16. Third Quarter SG&A Expense
16
28.7%
28.1%
27.6%
27.6%
27.4%
26.0%
26.5%
27.0%
27.5%
28.0%
28.5%
29.0%
3Q09 3Q10 3Q11 3Q12 3Q13
(percent
of
sales)
SG&A Expense
As a percent of sales:
• Lower advertising expenses
• Lower distribution center
expenses
• Higher store occupancy
expense
• Higher store labor expense
July 10, 2013
17. Third Quarter Earnings Results
(in millions except for per share
amounts)
3Q12 3Q13 Change
Net Income $124.5 $120.9 -2.9%
Diluted Earnings per
Share
$1.06 $1.05 -0.9%
Weighted average
shares - diluted
117.6 115.5
17
July 10, 2013
20. Third Quarter Capital Expenditures
$53
$93
$40
$42
$15
$19
$47
$36
0
50
100
150
200
3Q12 3Q13
(millions)
Other Supply Chain
Renovation Program New Stores
• New store investments
– Fee Development
program
• Chain-wide renovation
program
• New distribution center
in St. George, Utah
20
$155
$190
July 10, 2013
25. Continued Strong Growth in Consumables
12.2%
16.1%
18.5%
16.9%
14.8%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
3Q12 4Q12 1Q13 2Q13* 3Q13
Net Sales Growth • Refrigerated and frozen
food
– McLane
• Tobacco
• Health aids
25
*Results adjusted for the extra week in 2Q13
July 10, 2013
31. Expand Merchandise Markup
• Strong supplier relationships
• Global sourcing capabilities
• Private brands
31
July 10, 2013
32. Increase Efficiency
• Shrink
• Store manager turnover
• Store simplification
– Schematic resets
– In-store marketing
– Door-to-shelf
32
July 10, 2013
33. Bright Future for FDO
• Moving the business forward
• Adjusting to near-term environment
• Investing for our future
• Focused on customer
33
July 10, 2013