Dollar General

Non-food discounters

I am continuing to look at the non-food discounter sector and have carried out a small financial analysis in order to better assess the market situation.

Dollar General $DG (+1,5%) and Dollar Tree $DLTR (+2,47%) are clearly the heavyweights in the US market. Both have sales of over 30 billion dollars and are positive. However, compared to their competitors Dollarama $DOL (-0,63%) only have a tiny profit margin.

The share prices of US companies have also fallen sharply in recent months. The US market is struggling with problems. Inflation and high costs are leading to smaller profit margins and poor future forecasts. Another major issue is the threat of tariffs on China, which is depressing share prices.

Dollarama, on the other hand, is a Canadian company and has at least nothing to do with China tariffs. The majority of the stores are located in Canada and South America, here under the Dollercity brand. The profit margins are really impressive for a "1 dollar store" and that is why the share has performed so extremely in recent months. Over the year, the share price has risen by 48%.

In my opinion, there is potential for further growth as the company continues to expand, especially in South America. South America is an exciting market for me anyway.

🧵 3

Of course, there is also a large network of non-food discount stores in the USA. With Dollar Tree ($DLTR (+2,47%)), Dollar General ($DG (+1,5%)) and Five Below ($FIVE (+3,03%)), there are at least three listed companies. I have also included the off-price retailer TJX Companies, better known here as TK Maxx, on the list.

In FY2023, the leading non-food discounters Dollar Tree, Dollar General, Five Below and TJX Companies posted respectable sales and solid EBITDA performance, indicating robust demand and their efficiency strategies.

Dollar Tree generated sales of USD 30.6 billion and EBITDA of USD 3.004 billion. The discount giant was able to increase its performance through a broad product range and a successful store network.

Dollar General achieved the highest sales in this group with USD 37.8 billion and an EBITDA of USD 4 billion. The company benefited from its extensive presence and a strong price-performance strategy that appeals to price-conscious customers.

Five Below achieved sales of USD 3.1 billion and EBITDA of USD 516 million. Focusing on young customer groups and inexpensive trend articles, the company recorded further growth, albeit at a lower sales level than its established competitors.

TJX Companies, the parent company of TK Maxx, reported sales of USD 49.9 billion and the highest EBITDA in the Group at USD 6.1 billion. With off-price offers and an established brand, TJX was able to further expand its leading position in the market for affordable fashion and household goods.

You can invest directly in all companies. It is interesting to note that the asset managers Black Rock and Vanguard are invested in all US companies, in some cases with considerable stakes.

Part 1 https://getqu.in/AWbuxi/

2nd part https://getqu.in/4cohv8/

Earnings next week

$LI (-1,62%)

$CHWY (-2,58%)

$NVDA (-2,58%)

$CRM (+1,29%)

$CRWD (+4,22%)

$HPQ (+2,17%)

$OKTA (+2,29%)

$AFRM (+4,29%)

$IREN (+10,17%)

$DG (+1,5%)

$DELL (+3,98%)

$LULU (+2,33%)

$MDB (+2,38%)

$ULTA (+1,88%)

I think it's about time to $DG (+1,5%) to buy more💪

What do you think?

The week summarized:

Monday

• Oracle Corp. ($ORCL (+0,28%) ) published quarterly results.

Tuesday

• NFIB Small Business Optimism Index (February)
• Consumer Price Index (February)
• Quarterly results of On Holding AG ($ONON ), Kohl's ($KSS (+3,86%) ), Manchester United PLC ($MANU (+0,81%) ) and LoanDepot Inc. ($LDI (+2,68%) )

Wednesday

• Dollar Tree ($DLTR (+2,47%) ), Lennar Corp. ($LEN (+0,72%) ) and Williams-Sonoma Inc. ($WSM (+0,15%) ) publish quarterly results.

Thursday

• Retail sales in the USA (February)
• Producer Price Index (February)
• Business inventories (January)
• Quarterly results from Adobe ($ADBE (+1,72%) ), Dollar General ($DG (+1,5%) ), Ulta Beauty Inc. ($ULTA (+1,88%) ) and Dick's Sporting Goods Inc. ($DKS (+4,82%) )

Friday

• Empire State Manufacturing Survey (March)
• Import Price Index (February)
• Industrial Production (February)
• Consumer sentiment (March)
• Capacity utilization (February)
• Quarterly results from Jabil Inc. ($JBL (-0,06%) )

At last, something is happening at $DG (+1,5%)

Does anyone have any info?

I remain convinced by the company, but this is the last tranche for the time being

Bought the first tranche ✅

I am convinced of the company and see great potential to see high prices again in the long term