The old way to invest in Dollar General
Posted on November 19, 2009 at 11:49 amGimme Credit analyst Evan Mann says Dollar General should continue to generate ample cash to invest in growth and improve its debt ratios. Because of that, investors would do well to buy the company’s subordinated debt, which has risen from $80 to $110 in the past year and comes due in 2017. Meanwhile, the company’s newly listed shares (Ticker: DG) are again testing the $22.50 level that has supported them in their first week on the NYSE.
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An interesting downgrade
Posted on November 16, 2009 at 1:47 pmGoldman Sachs has lowered its rating of Dollar Tree (Ticker: DLTR) to ‘neutral’ from ‘buy,’ saying one of the main rivals of Dollar General will face difficult comparisons after this quarter.
On a completely related note, Goldman just got paid big time helping take Dollar General (Ticker: DG) public again.
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Dollar General’s map of the future
Posted on November 13, 2009 at 10:29 amNewly public Dollar General (Ticker: DG) plans to open 600 stores per year for the foreseeable future, but CEO Rick Dreiling says new markets — including all of the West Coast — will only account for a tenth of that. There’s plenty of fruit still on the trees in states where the company already operates.
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A second look at Dollar General’s high valuation
Posted on November 11, 2009 at 9:44 am
Pali Research analysts Stacey Widlitz and Brandon Ross say Dollar General has earned its higher valuation over its main peers by virtue of strong execution, a better private-label program and more aggressive growth plans. They also expect strong per-share profit growth due in large part to the paying down next year of some $600 million in debt.
However — you kinda knew that was coming, no? — the Goodlettsville-based retailer’s pending IPO looks set to value the company a third higher than Family Dollar and Dollar Tree. And that is a bit much if you’re looking for more gains, say Widlitz and Ross. Seems like Dollar General has quite simply done too good a job over the past few years.
DG is highly exposed to consumables which have been a tailwind for the past two years. However, that means the company is less exposed to a turn. DG has also completed most of the “hard work” in its turnaround story… We would rather own a name … that has upside as a result of initiatives that are early in the game and should drive EPS upside in 2010.
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You don’t absolutely have to get into Dollar General at its IPO price
Posted on November 6, 2009 at 12:57 pmBut it sure will help your portfolio if you do… Jutia contributor Brandon Clay says the Goodlettsville-based retailer likely won’t trade at a discount to Wal-Mart long after it goes public.
It’s a cash cow so long as the debt load can be managed and eliminated.
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An idea of how Wall Street will welcome Dollar General
Posted on October 12, 2009 at 7:47 am
By now, the premise has been clearly established: Value-oriented retailers — especially those with “Dollar” in their name — are doing very well during the recession. Friday’s upgrade of Family Dollar by BMO Capital Markets sums things up nicely. Get used to seeing phrases like “strong cash flow yield” as Goodlettsville-based Dollar General preps its IPO.
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Dollar General walking on clouds
Posted on October 9, 2009 at 8:25 am
Discount retailer Dollar General has signed an agreement with a New York-based IT provider to migrate its enterprise database onto an offsite cloud. A 1010data exec says the Goodlettsville company is the first of its kind to make the move.
”This landmark decision signals a fundamental shift in how retailers are thinking about the value of their data and the business opportunities provided with insight on demand. We are honored to be a part of Dollar General’s business strategy.”
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A Dollar General IPO update
Posted on October 5, 2009 at 7:47 am
The Goodlettsville-based discount retailer recently filed an amended S-1 that updates some of the info associated with its pending public offering. Among the new details:
• The company has applied to have its shares trade under the same ‘DG’ ticker symbol it had before going private in 2007.
• The company last month paid its shareholders — primarily private-equity firm Kohlberg Kravis Roberts — a special dividend of $239 million. That’s about 20 percent higher than its earlier estimate.
• Prior to the IPO, the company will organize a reverse stock split that will reduce the number of shares outstanding and increase their initial offering price. That price has not yet been determined, but a January analysis connected to the issuance of options put the shares’ fair market value at $5.50.
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One of the main reasons Dollar General is going public again
Posted on August 27, 2009 at 7:29 amThere is plenty of talk that Dollar General owner Kohlberg Kravis Roberts is taking the discounter public in part because it needs to test the waters for its own IPO. But based on Dollar Tree’s strong numbers reported Wednesday, it’s clear that the private-equity titan likely couldn’t pick a better time to float a value-oriented retailer.
Dollar General grows IndyCar sponsorship
Posted on April 27, 2009 at 8:28 am
The discount retailer’s partnership with driver and team owner Sarah Fisher has been expanded to include races in Texas and Miami.
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Stay a little longer, won’t you?
Posted on April 6, 2009 at 8:07 amDollar General has renewed the employment contracts of CFO David Tehle, Division President Kathleen Guion and General Counsel Susan Lanigan.
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Dollar General looks to staff up
Posted on April 2, 2009 at 8:59 amFrom the TV news people:
Goodlettsville-based Dollar General announced plans Wednesday to create up to 4,000 jobs in 2009 to support the company’s plans to open 450 new stores.
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KKR’s trash-bag talk about Dollar General operations
Posted on March 24, 2009 at 12:19 pm
The Wall Street Journal carries a rare item of good news today from the business world, and it involves Goodlettsville-based Dollar General Corp. — but it may not make very comfortable reading for former executives who ran Dollar General as a publicly traded company before it went private in July 2007:
Here’s how fortunes in the leveraged buyout world have changed: The best-performing deal of billionaire Henry Kravis’s empire is a deep-discount retailer selling $1 dog treats and $2 bleach to lower-income shoppers.
Dollar General Corp., owned by private-equity firm Kohlberg Kravis Roberts & Co., is expected to report strong fiscal 2008 results Tuesday. Its earnings before interest, taxes, depreciation and amortization, or EBITDA — a common measure of cash flow — rose about 35% for the 12 months ended Jan. 31, according to people familiar with the company.
(Those earnings are now out, and they’re as strong as advertised. Here’s Geert’s take on them.)
Further down in the WSJ story, in the part visible only to subscribers, are a few key figures underlying Dollar General’s financial improvement. Economic conditions are not the only factor in play, the Journal suggests:
KKR credits much of Dollar General’s success to new managers led by Chief Executive Rick Dreiling, who joined the company in January 2008….
Mr. Dreiling and his team have boosted earnings by increasing private-label goods and adding other higher-margin products. They eliminated duplicative and unprofitable items, such as eight types of coffee creamer and 12 varieties of trash bags.
Dreiling’s team was able to replace those products with new ones that carried margins about 5 percent higher than before. And they have brought shrinkage (inventory lost, incorrectly priced or stolen) down by some 20 percent, saving $55 million in the past year.
Dollar General director resigns
Posted on March 20, 2009 at 2:50 pmDean Nelson, chairman of marketing company Primedia, had been on the board since mid-2007.
Dean B. Nelson
Mr. Nelson has been the Chairman of the Board (since April 2003) and was previously President and Chief Executive Officer (since October 2005 – September 2007) of PRIMEDIA Inc., a targeted media company. He has served as the Chief Executive Officer of Capstone Consulting LLC, a strategic consulting firm, since 2000. From August 1985 to February 2000, Mr. Nelson was employed by Boston Consulting Group, Inc., a strategic consulting firm, where he served as a Senior Vice President from December 1998 to February 2000 and held various other positions from August 1985 to November 1998. Mr. Nelson is a member of the Board of Directors of Sealy Corporation and Toys “R” Us, Inc. He has been a member of our Board of Directors since July 2007.
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Wells resigns as Dollar General debt trustee
Posted on February 25, 2009 at 11:53 amWells Fargo Bank has stepped aside as trustee of $1.9 billion of debt issued by Dollar General. U.S. Bank will take over those duties for the two debt series, which are due in 2015 and 2017 and are 10.5 percent and 12.5 percent, respectively.
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