Dollar General (DG) 7 Dec 232024 Q3 Earnings call transcript

Good morning. My name is Robert, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Dollar General's Third Quarter 2023 Earnings Conference Call. Today is Thursday, December 7, 2023. [Operator Instructions] This call is being recorded. the earnings the morning. press to in are listening company's the release for replay call of available Instructions issued this

I'd Investor the Walker, turn now like to conference. Now Kevin Mr. start conference your Vice Kevin, Relations. over of you may President to

and morning, good you, Thank everyone.

CEO; On with our are our Dilts, Todd today call Kelly CFO. the Vasos, me and

Our under News investor.dollargeneral.com our website earnings at release issued Events. today can be found on and

Litigation goals, in Reform today's that comments forward-looking the you statements as Private to not defined about about strategy, Securities expectations that of caution financial me Let limited other beliefs historical statements Act statements include matters such priorities, XXXX, guidance, as and fact. or are future our initiatives, opportunities, plans,

Factors cause and differ from to, These on statements are These report subject and XXXX morning, call. projections. this our those Form earnings in issued to are the in and could later results filed our identified XX-K made any that materially comments under actual on release are risks not expectations include, this that and but XXXX, factors XX, our limited filed Risk in to March uncertainties periodic

unduly statements, only of which date. on should as rely speak You today's not forward-looking

up to obligation your Dollar General call any law. in information questions. discussed call or disclaims any [Operator unless the of for update will our the we open revise end this Instructions] At by required prepared remarks,

to call it Now to over Todd. pleasure the turn is my

Kevin, you, Thank welcome joining to and call. everyone our

positive growth value privileged customers, the convenience and for I our passion are to this Dollar to shareholders. I deep General. how we employees, me value believe for I Let ability a this continue at our start and for to prospects and have for long-term saying am our serve. model, and to future back for excited be our in by company a our customers experience deliver

are is to delivered head-on take and facing environment. seriously we've And positioned our challenges partners customer. in do a customer tough our our we that macroeconomic know and communities now. believe financial so and looking others We for for serving constraints Historically, that those we well are mission strong met of

of retail, ways by Dollar products eyes In great that And on it they we is the the at looking of convenient, state best easy-to-shop the our the business stores. customers through at the to provide the and friendly diagnose General one customer. of need values in know to rely

of areas This and have To rebuilding the we address about opportunities we're the spent where understanding underway. our to fresh and taking last to at be all about a do the business already spend this challenges have in refocusing is look us. is We but front several efforts a believe opportunities, to of and of those We already that team time want clear, well I as need weeks not what of we good majority taking as our organization, or challenges action. a today.

the basics performance. quarter provide our overview to review our in chain I and on morning I in but all and details will within want this our won't an getting After the supply to that, our I stores, third our highlight focus merchandising. to Kelly back share

ends to where for our want begins stores, everything I with and customer. start our

As lens the footprint, we our so store of drive improvement through across doing are we our customers.

return, teams with we our we directly which are we hours every this this announced, store believe in we After the we are approximately support dollar do But are is investment means investing we level customers. review, labor As we continue invest, appropriate. drive $XXX as store helping year. ensure to have we spending must million to previously it our of greatest

to directly teams from away the mind, management redeploy have instead inventory in customer smart store-level we decision to hours more greater labor emphasis and activities. store that teams our and service a on made With and

focus highlight end, areas that to X will our greatest want I of believe we drive the in To improvement stores.

plan end our particular, area. in and increase front at of we employee checkout the the presence stores to First, the

in the While the to friendly, self-checkout not checkout convenient a greet proposition helpful who has for contributed is our it stores, assist certain while there to the employee process customers is of importance and happening. does reduce customers

associate communicating already by our front of and activities expectations labor presence clearly We of more begun the our to stores. front-end an have at visible around allocating the

Second, as our on-shelf sales. by teams our believe our convenience store we management will as our which we are positively played customers' role well our the availability process, impact reemphasizing in perpetual in inventory perception

management To on reallocating toward focus investments processes, our we including product greater shelves store quickly. of are do inventory level even an getting labor more on some this, to our

execution reducing across of engagement managers for the our opportunity will also base. are the We for and with consistency our store span more managers district more control provide and their and which teams store

well experience is focus stabilize shrink than store on basics our higher position, we And the improved manager that store we believe and at when team actions more improved like. will level sales drives manager these experience and benefit, and our our customers ultimately take entire for know the positive as a the results. we where we as which As from turnover currently we store in retention see stores, the we

Overall, in will should focus convenience help end also we These our shrink. actions the should on while satisfaction, efforts improvements and customer availability including customer service, as engagement retention. reduce employee also well front drive us improve these sales, believe as on-shelf and

chain. supply talk to want I Next, our about

recovering from We have discussed progress had year. the late that we last made constraints distribution capacity significant

particularly customer, of comes additional when it our we serving the stores. through lens to opportunity the for see However, improvement,

chain in on focus to within time for we or goal As OTIF. the basics, back to be getting truck our on deliveries and the full, our is supply

an and overall of a higher for OTIF in continue we sales. our our which simplify rates our higher, as work better As experience customers for drive to again we well as teams, store expectation both results the associates

want areas X briefly focus supply chain. of highlight within our I to

First, the centers. distribution better inventory optimize plan we within to our

reduce steps including product which more moment, our to As allow discuss are for distribution of we rationalization, the teams. inventory, I will movement efficient for in SKU taking a will

implementing initiatives improvement are centers. within productivity distribution our we Second,

While factors, to control and we things both we are productivity have productivity internal by the and rates or control. external for working teams been eliminate mitigate impacted impediments our can

expectations. standardizing clear system These providing optimizing in efforts standards layout our while include configurations on the product and communication and performance facilities,

effectively capacity that distribution last inventory centers. as we third, existing we're and through our now to used past number warehouse being more reducing And product facilities the we year, constraints outside are of store temporary experienced the to flows

open distribution we these year, we advantage By have existing taking over year those new reduce better the the leveraging and significantly can of the we believe needed. centers of will permanent and opened amount temporary space we next facilities warehouse last

temporary we will of a maintain these facilities. historically, likely done to few continue we've As

we of out of expect However, to them transition and QX in many year. into next

of chain supply lower costs, customer these transportation and All translate and our better while results. better rates should within actions experience OTIF distribution improving all to sales and

Finally, approach reflected our Once on and of merchandising. I the our to fundamentals to to want customer. our eyes on again, we focus speak

offering than customers need. merchants, greater want our priority the For and is value products great no there of our

classes to factor we living are shape continually I most are comes trade. shopping to in am gaps pricing. paycheck our pleased competitors be to with and good that everyday that of to our offering in when customers note decisions. in right is Our are and their tell our And us paycheck where we important we it value price the want

drive With maximizing drive as that taking hard the are what in effectiveness as any for environment, do activity challenging and and customers including for savings said, opportunities of to highlighting other promotional at look we we this value can a share private economic growth. well traffic to brands our else

they Beyond areas to these challenged well customers, immediate rationalization most and drive of for of as our merchants meaningful stores as for focus. our how supply also have one chain can simplification our with the SKU we opportunities consider

SKUs we of and our stores to identified eliminate productive; through. them several ultimately to DCs first, end, moving then out to that have have become To less by opportunities certain sell that our

we and over these higher operations while As our most shrink, stores SKUs products while are customers. that can store DCs our have to inventory help further to simplifying turns our in actions of driving manage, will believe and We sales serve, term. lower to efficiencies teams inventory and greater higher important both fewer drive the cost reduce longer to

on focused And been dividends success. with profitable short driving and to retail that these have long improving are over position. sales areas, results share we have as not will and satisfied identified the know we actions growth. while long-term all we term, We believe that We our our are market current remain still essential pay both traffic in driving

at to levels the Dollar the In across General getting are summary, here we back all of basics organization.

overnight, some that been we years. but believe Our the will continue towards and foundational desired fundamentals results we not will our past see on XX early to make over have to executing progress the success wins materialize

will higher our sales profitability result, customer driving we in a and believe As while we the enhance significantly increased business. experience

discuss XXXX real results this over Now our I as top before for earlier some morning. our call I we want of to estate which the as to line briefly turn QX Kelly, well announced plans,

we decreased was billion product decline third driven net sales categories. with the our all non-consumable a quarter. The and to consumable highly sales. included product in product year's an compared increased as declines sales sales quarter units overall X Same-store expectations. average which to well share in growth, Net Within sales dollars both grew as transaction again in our QX, in and market X.X% in net third driven in billion amount, line $X.X decrease $X.X primarily of by was by last in X.X% sales units

overall in an was monthly perspective, very cadence months growth similar sales quarter. all of same-store From the X

improved was note QX. the traffic quarter to However, pleased turned in sequentially that customer traffic positive After middle the slightly and the period of I'm starting quarter. negative, in period each positive

improve from Dollar same-store reflects to in General. the Notably, quarter, we back in the sales our on traction work believe although here to traffic and Customer getting which, early at November, basics continue early

to Turning update quick customer. a our on

in During XXXX, continues the work, significant be to we trends we constrained what customer which our we in see we in spending on behavior. to these is Based into recent our categories. especially feeling anticipate by what supported they discretionary as customer continue and spending us may environment, survey macroeconomic their pressure most head tell their on see are

of we plans year unique for as is discuss relevant ever real I we end, the proposition as This further more to doing our communities. in want many that importance the to convenient and look today, To next our offering value work to growth this marketplace. and as reinforces we're estate believe our extend

of our estate remain pleased one be of projects. performance to the core competencies our continues real and estate Real we with

a has productivity the expectations, As we base; forma metrics approximately expect to or store we X to new in cannibalization, portfolio, remained consistent new mature against which reminder, expect monitor to compared we overall cash following sales continue predictable; store and on store which less; our in and X which years store including returns, performance XXXX. payback, the pro new of be XX% average

store I is moment. expectations while I XX%-plus. a being which modestly very strong, our change more of occupancy new driven for This in store want to by cost, openings partially detail discuss note from are higher down that new historical in our target still will and returns,

and comp be see sales what from our performance remodel which and greater drive for see We our which than XX% also to DGTP continue returns, continue X% to from strong lifts format we stores. between our average new stores,

real With uses new see to of remodels and In X,XXX performance, continue projects to consistently fiscal strong X,XXX best estate one this XX our execute including XXX as approximately XXXX, relocations. of we capital. projects, plan openings, we

smaller want a While a recent than in have opened number the we projects, number a of years due this couple I significant is of to to considerations. primarily acknowledge

the getting to few to discussed want company we ago. efforts back the a basics are ensure that and our First, focused on moments I the teams across

projects these execute And significantly. increased capital second, the to has required

initial of more has rolling square increased opening For XX% the larger since than store in XXXX. began example, out format our the foot X,XXX we

nonresidential have construction Additionally, increased since costs significantly pre-COVID.

efforts be we over underway the to costs, we of impact has costs from engineering team will inflation. have of believe, of number a seen the projects. we these including out reduce able mitigate time, And to some Our

remains With said, pipeline that our robust.

number opportunities of are of but And for we these stores XX,XXX overall States. We the continue as to more see than each said General in bannered opportunities Dollar that pleased we reasons, will for before, opportunities, not a United remains we capture the of variety high.

to store element strategy, continue additional innovate I our and some want as estate XXXX. on for color to important real plans We provide a formats our moment to on take an of

XXXX new a We on where positive believe more impact heavier communities with placing stores we our and XX% are we for the stores in planned have in can than emphasis rural rural of most our customers. significant

more continues productivity box. These foot XX% our expanded feed beauty more provide larger in of build sales produce stores them our meals to products additional cooler and new foot in will and which our one help In than square to addition, to fresh serve be square stores of their X,XXX formats, including per traditional offerings to many also to health opportunities families, customers, stores. larger as store increased relocations compared drive our and

as approximately a sales environment. a to store Also plans this we locations pace included discretionary within measured continue concept with shelf XX in new at pop move softer our are

been we've include for initial Mi Dollar XX entry new new store stores our with also into General Mexico. Súper very XXXX and our Finally, Mexico pleased approximately plans in

increase Turning cooler to XX% produce add Nearly the stores. count which in as are as of planned for the potential significant our in these fresh DGTP many be will to format, in to provide opportunity well remodels.

in real estate as We about of serving, number communities we are are to our rural the continue for particularly excited plans we America. XXXX grow

opportunities In are us, front closing, growth uniquely capture. positioned well to we tremendous which have we in of

and diligently creating on customers the for for to We our opportunity are employees providing we are on value our our working meaningful back long-term basics, laser-focused and serving shareholders. while getting

to that, like over now to Kelly. would With the call turn I

you, and Todd, morning, Thank good everyone.

refer the Unless all EPS all a earnings diluted we financial and corresponding to me has all year-over-year, Now through you to note of years that important fiscal comparisons quarter, take references taken specifically the of the Todd share few to highlights are noted through per details. otherwise, let year. you refer some

XXX third XX%, markdowns. a an transportation These increased basis to decrease decreases gross was decrease partially primarily For profit of sales inventory This lower quarter, LIFO of and shrink, attributable in as a was costs. percentage in were points. increase by and offset markups

driven $XX Turning was depreciation partially services These was increase rent, professional our points. and a This decrease including XX.X% XXX fees, offset increase to of by compensation. an basis investment credit card maintenance, approximately well labor, of as and of which targeted other debit purchased, SG&A, million retail were repairs in as incentive by sales, fees. labor including amortization, and transaction

profit $XXX.X down the Moving third income the statement. Operating million. for quarter to decreased XX.X%

decrease Interest rates. average As was of increased a percentage basis million the for in third XXX a sales, higher $XX quarter, million profit interest by to borrowings year's $XX points. last expense X.X%, driven higher compared operating quarter of to and

by federal primarily XX.X% earnings higher for tax lower the by of quarter. This from employment partially tax tax effective in rate effective third caused increased quarter quarter benefit benefits rate. Our and rate were benefits compares taxes items from state XX.X% offset third the to the was credits last for a and year. rate-impacting These is to lower an increased due before

the Finally, decreased $X.XX. EPS quarter XX.X% to for

billion now were Turning Merchandise balance end basis. and our increase last compared the store the a sheet flow. per to X% X.X% inventories decrease a at quarter, of cash on and an to of of $X.X year

store per year on decreased approximately In nonconsumable inventory XX% compared decreased basis. a last XX% and addition, to total

inventory quarter reduce While there last its remains opportunity moderated continue of the inventory and the from levels. year inventory our believe growth quality to good, rate to is our peak has in significantly the optimize we third and

ensure $XX markdown costs continue these including announced plans investment, to impact to million maximizing of the are we We actions. the associated our related review to previously

XX.X%. inventory distribution of customers, optimizing support on flows generated stores, focused billion, our QX, centers our Year-to-date, growth better overall operations and We position of plans. the to an $X.X business through are cash from increase

Total initiatives. capital to spending billion and our and stores, in included our remodels relocations, investments strategic related expenditures through and were and QX distribution planned new projects transportation $X.X

dividend for total outstanding $XXX.X During the a of quarter, share a payout per million. of we paid quarterly $X.XX common

did this we planned, not As repurchase quarter. shares

to to provide want our take outlook. financial an I Now on update a moment

XXXX. for following the year expect fiscal to continue We

range First, in of to X.X%. growth net sales X.X% the

same-store $X.XX of decline sales $X.XX to range negative approximately EPS in X% a negative negative flat, to or XX% to of the range Next, a decline XX%. of and in of the

effective assume guidance XX.X%. EPS tax Our rate continues to approximately an of

spending we of and in range activity. capital the expect Finally, $X.X billion $X.X billion, share repurchase to no

me our Let as some now rest of the for provide context additional to XXXX. it relates outlook

we in update softer trends a year, into see provided and to consumer the than guidance our continue coming we those when October. sales were While more trends anticipated expected we constrained

Todd by environment. We our term, outlined in an are the earlier, in aided to the categories. continued expect this ready sales that poised brand near customer serve particularly have In and line, economic on actions always been the overall all-weather challenging we nonconsumable we pressure and the

in shrink Within has shrink a with recent continued count to takes store's gross in a headwind, and show addition improvement up next typically will in any as remain margin, pressure into us markdowns, year expect a our to sales least at this sizable to we most from mix our be results. previously financial year announced

tractor carrier Partially and distribution distribution capacity expect benefits and challenges, greater from offsetting efficiencies. these our transportation performance, and we lower fleet rates, other private center

DG benefits We our realizing including initiatives, to Media the continue from DG Fresh expect Network. also and

to better to $XXX previous to distribution XXXX, our in is with retail support consistent stores customers, have up make to QX. Turning during to of stores previously the of remaining discussed approximately $XXX planned our our in SG&A. we and labor investment million which expectations. total $XX the We our in other plan Overall, million expected million and total markdowns areas are labor investments centers

these impact the our return ensure We while for maximize greatest and every customers stores reviewing driving their moving are forward. to investments we aspect of

us continue well and to us guide priorities capital Our today. serve allocation

in is store as high as well business, investing expansion such organic our growth initiatives. new strategic return our including our priority first base existing store opportunities Our as and

to return shareholders over appropriate, share dividend Next, a finally, payment. quarterly And repurchases. through we and when cash time,

Although of our BAAX. to particularly to ratings, debt cash XXXX. are metrics approximately focused are our debt leverage very head ratio and we in credit to environment, generation strong of and as adjusted target this currently current in we EBITDAR, are grade support and Xx into which, that adjusted all improving maintaining flow on reminder, is improving a is important, With our our investment focused on as commitment order above we our BBB cash said,

remain to and low-cost operator the capital our committed and financial consistent, we the manage investing summary, strategically discipline In of we as maintaining term. long performance a delivering how goal expenses strong with while for

model free We our are and drive cash strong shareholder business financial and ongoing long-term growth, to same-store store priorities new sales value. confident returns, in long-term our healthy profitable flow

that, over to With turn call the back will Todd. I

you, Thank Kelly.

basics. we up, As to back laser-focused that wrap just say on let the me again we're getting

customers thank of employees every and day. their and holiday communities proud this team, in want our work we over in mentioned doing our serving to ahead. of earlier creation we're operational time our some months remarks, customers our a and desired you for shareholders. as . This season. busy actions team the together we drive more results. are actions the we and value deliver XXX,XXX customers I quarters more will I bit excellence am and to through the look expect the my look coming move to demonstrate As necessary in these to forward sharing for to for significant to with to long-term progress the this employees forward commitment our serve energized, little and take to But approximately taking I confident is

open lines operator, With like that, the for questions. we'd to now

Parikh Our with comes Instructions] Oppenheimer. question first Rupesh [Operator from

back, Todd. Welcome

forward? where operating can can get going margin bigger operated? Do it potentially So I And longer-term to the level then to with where historically see just you operating think opportunity like X%-plus to margins. kick sustain you you do a longer you term? of buckets do to get wanted X%-plus, feel off back that you X%-plus, have And you

the hear for the that to over I'll and General part take it of Yes. Thanks Kelly. have basics. second We gone a the pass back Dollar to question. then

and say, energized levels. heard this that have prepared to at in has I You different all truly company my remarks, it

lens element Everything actually, the touches here, starts what and our consumer stops at done the at of we've and nothing is the science again, And of we've store consumer. every looked in actually gone from our It rocket customer. business. with the

is piece. But Again, an you yourself think organization. good sometimes remind always and to that, would that remind it's ongoing you

of we've that. saw So prepared I that, you and the a And back my of remarks, lot all done with basics, that but to won't getting because really through in it already to way. is yet that making deployed million have quarter, the of our $XXX in sure that labor stores come labor in proper in additional the the we've spend fourth and the go

again, store. do. immediately as store what smart it the I where redeployment of that's to point so and we that we're our and think very customer And that important touches our end And directly day important, going every each out, money is front from teams of the to exactly and it's it into also helps that, do

the And line to shrink ring the it to of the It end on store. got at and is front helps of that you've the because the end always somebody customer. the monitor got meet, the also because helps front on we've line up store there somebody sales greet

side And our secondary self-checkout We also, checkout too a to much convenience not primary. this self-checkout in as relied the using had we year because reply vehicle, helps be it on should and stores. on start a

of And then you chain, focus difference. when all that, right our help. full time, on the And or time going and I going the our to OTIF stores at on it's to in product in would so to you supply a make really right that's that, tell world with getting

that when disruptive the the do it the operator store, in; on shelf. more and on truck onto your old it you there's not up way, the the to by get truck and when I time items am, shelf in an able right comes put all the getting nothing being Again, be having

piece. groups merchandising step best honing party got the one to of times, But retailing. you this the go always forward. have in all at exactly of to consumable And need back We've look be what in brought you merchant at not do what to to and then lastly, you really probably may

Sometimes the you to number we're you SKUs carrying, the would I go tell is here forward. levels. back on couple being rationalization SKU always of that's ongoing a step got piece And at General. of to One an case Dollar

But turned it's be step really are eliminating energize have idea or in here more time we've even already type off I line. in off here, XXXX. is lot or lot of gone believe that back a that the deep to that and actually more And SKUs. SKUs tertiary the And to come. a of There's to secondary turning more going

So X consumer can may put the to going store's going [indiscernible] an or on simpler to goes variants [indiscernible] on actually she X life the make different to is not think easily We We example. the of X the drop about to life shelf to difference, of X shelf, today. The is as shelf. those. know or the make a simpler when going her product little have

warehouses also, And is it's actually of our slots. eliminate holding do lot going what a help to

to help our increase So of we old an to into being this, line in again, But bottom as rationalization. to these top Kelly? will line, and others. than also am, faster bottom the over that I retailer and actions actually fall which down a it 'XX. I And is start move that know pass to going fabulous, line line go to some to I'll lot benefit the Kelly, will we're all SKU do of what

Todd. historic knows, so And goal is we're levels margin used to. to get certainly Thanks, everybody back our and of just the to profit operating that

little I 'XX want going do 'XX color for we're some that to of around guidance, obviously, give seeing. just While a not headwinds we're of give today, to near-term bit

of well lapping compensation first stock-based significantly compensation. The as those as really is around incentive reduced

a And about think headwind be near-term as will that so just XXXX. we

The moved as now rate. some we're higher benefits seen effective years. tax expecting as we've state compensation other really we're well historically tax effective the looking is rates piece the last stock-based we around that's that as due a to thing just few have And lower higher at through right

not to So headwinds, we certainly that long term those are need near-term about. anything worry

other around is shrink. The thing

know, as pretty while, carry to a for been definitely going shrink XXXX. it's has you and so for And into significant us

remarks, As the it takes I in your up talked in start prepared showing while about financial just a to results.

where basis. higher headwind give we you on year-to-date QX, a are Shrink a with actually And more XXX color that. of for is to point running then just we actually And it's bit shrink bit little moved little us. kind basis than just into of a as

And pressure way, along -- hopefully financial us, near to results we're term that a looking something it'll in for XXXX. mitigating so certainly the we're up and later show in the

basics just And is making think watching getting and to noted that about we back certainly be able sure forward. then all-weather environment. that gains and it her we're serve matter whether customers, so economic nicely to as we're the what underserved -- be we've to And just Todd and employed. always doesn't she continue to our us will brand, as we certainly move just an up going set stays to gainfully and All her the we actions been

we and on this basis, get business is fundamentals accustomed this that a delivering. model are going this give to that holistic give and levels lot that's the you longer-term the we're of a We're little what on And bit of a in March you to back view historic is, 'XX. model little color remains to strong. color I'll overall, a going say So believe there. bit more more absolutely But to unchanged

from next question is Stanley. Our Morgan Gutman with Simeon

and profile take deeper you business. that And look to opportunity. reset Todd. back, was rejoined, of the you could if there you opportunity Welcome back talked that revisit When about you the having to a time and financial invest an

it to investment building that a months than more updated reasonable do do in lean and the thought getting sustainably, the so that? make you start back looks think frame, X.X to time forming in business you X% thoughts plus be or on any in a bottom a As have thinking needs sense to you Does margin ago? when business little builds about you back, it

Yes. you're Thank question. the And you right. XXX% for

take the view first weeks holistically, our holistic back click deck you as a operations, did The our few. not at off just on merchandising across areas, here, I chain, everything and our only supply looked few heard, a but I'll

any investments were me been we believe don't into But other before right are that move I in believe already that I we I the need it thing let labor make outsized as off, a investments 'XX. click point million year say have exact million and that first, do. at talked $XXX totality about see this to I is that need $XXX the to this larger investments that

I right is the being the And do to sure that indicated, appropriately better few consumer now make areas our the I stores each that's last as that weeks. exactly day. million consumer and over helps done used in every able is and our what serve the $XXX and thing the touches believe, to be we've that right

smart directly every service to to that's day, up our out why was of the in the XXX% it the effectively believe of stores And stores the to that each and tethered end ringing that, taking our teams for the customer taking time customers. dedicated end bunch more I labor our front equation, cover front of that whole of and putting

once send product. and that that And and the correct it frankly, product, ongoingly first into again, and we need if one quite you doesn't day. our ensures General, perpetual a won't inventory each you Dollar the deploying some then labor Because keep of system every that also correct for of realize work that is

a out of our And so, coming it the in And benefit. see smart so of great into gotten We've back. And teams then the bringing unfortunately, the now looked out further this about of redeployment is this over really year to company, of we will those for of seen million a quite pricing. further inventory And of as $XX frankly. Dollar first I as last the hours I other whack, and traction, fabulous the our numbers but lot are midst perpetual well. be or feel of again, General, areas great have that will

chief our pricing of when good great thing in, channels looks step across back and competitor, very all everyday in great The including position. I trade, our

we As compared right are fact, historical like to our them a matter see to would where of levels. gaps

there. good very So

promotional Our across have still spectrum, the recent activity. it call semi in while uptick weeks believe activity, on an would I we I seen rational promotional

into watching something that moving well, sure exactly holidays? we you will Simeon, going that service move into We're We're Or needs stays it customers. needed. is to our pricing that is we'll carefully. as to where take 'XX? to it action So Is that But to whatever we're we're pretty quickly, us watching we're that and make sustain know because our carefully. be the that take going

arises. the be to But time that point, reserve see reinvest to anything I if it always at to don't But again, do of there. large any need this right in a amounts, we money do to margin sums able

So I already the this talked right we've in now, think are investments about past the year over system.

used, proper appropriate. believe, I in and deployed appropriately being the very believe They're way. all now they're I areas are

starting consumables already quite frankly, what bit And as into in that's benefit, we're and a to see line both some move our on moved of top execution. Now as November. through nonconsumables, We're we especially it's we November of doing. results time for little

see quarter, long-term So good very to to this it's Dollar very market. look the But going very and it's in great early getting rest prospects about levels here General Kelly it's General. go we feel at as again, how the of historical at indicated, is to back assured, Dollar new in early to it. caution But

question Matthew is next from Our with JPMorgan. Boss

elaborate just what's of consumer? low-end cited, that Could some level. you're trends The changes you ticket that higher at you in versus Todd, behavior the Maybe, the from I traffic on help seeing recent some quarter? comps think, different tied improving, November in comp the Did is actually the turn through asked are third positive constraining a But to of interesting. traffic initiatives? way, maybe these

just And what you seeing to pause occupancy other on maybe down you're on then the of new just those the elaborate maybe bit, pieces through, And that just here? on shift new of stores a take return moving costs lastly, and shift just a some some could parts? store the you to the mindset walked and

sure. Okay,

did we as through quarter as the we the uptick similar, but move in at we traffic as we and periods look we of through then were results As November. move the indicated, our see our very continued into quarter, each

our in into in we of color but well say as on comp November, Now I'm we trajectory a not lot see you a going that give November. to moved as to change did

So tell it was consumable both the I of the on it side nonconsumable would And see. was again, great to that, you and the equation.

into Now move end tell to do, the still of comp one comp the through we Well, to at November, lot historical General. October comp?" get would actually but type have here work was I to you as back say, we "Well, Dollar much some the where a Matt, rights in is of would better it

as and basic Making going stores be work when they of back believe into sure half I help faster into find of going very are the the us is we're get 'XX. walks the to very, be need store. QX each there in every doing the QX to you move to that important. back our day to able and consumer They'll what stocked is

to to already So We've more that. started come. see

over our seen watch that each and about believe has markedly every improve I betterment in-stock that and November. rates it few have We added actually comp and And of the in We've last it talked to I some check week. that weeks.

come. to more So

and being an as store. -- been effect overcome can we in back macro what macro that in I control, consumer control the here with able she's some what on believe those to with that the prided well And help and and environment we feels But us sees of the to basics. believe has shortcomings just when others. on the can what always we're doing you and still General, we've Dollar ourselves control which at as

but lot do, yet we're more about I got we've that. here, feel track to a the So come. feel We to of like but on good work right

stores. As our new far as

we noted, cows. sacred looked the you there of of We bit this no looked at walked As was did I was that business. the we one Again, take soon a as this Again, cracked I areas as piece open door. a in -- step back this little of year. at every single

looked team, that best prudent while is stores, our capital step the every capital. of feel here of at the including single a our do back. the the of that investments with I new board, take use our every I things across wildly still to a as scrutinized, P&L One decision line, And it in I was line

Now is, a a some of XXX that's would it that's stores, say, decision building But reasons. people still not step "Boy, Matt. commitment," for too it prudent large was big couple still a a of back, and

interest to we to increased today. of The to rates a up. team we further those good build to a the these have even has mitigated costs, lot but cost still are very a build costs. store about One, of work work the of do store done. about I mitigate cost some The yet up. talked is feel the some They've

take also So why to bit development, in a little give in. back to new store not buildings opportunity a of our teams these step lower a put get cost the

the some you so So to it's can we're at of a probably well, to go speak. further back, forward a when years. exactly we then we And then do do. And little it's as bit right little bit faster we that the work just you doing as look back in thing have do a step thing that outer I to believe the to internally, prudent step as

that -- not a new Now right see phenomenon, openings guidance the at we're it this or would any can't forward. our reason as way store this tell we're may past why here looking not continue is 'XX, up we while we to we may be move believe give that that X-year to I I don't you now,

to market General the we the those quick capture majority continental out oversized release United very XX,XXX and put States, see We prided love what still and in XX,XXX of being to opportunities. Dollar ourselves on the to portion always a on opportunities we've and first

yet Kelly, nothing we you way of in touch the stands may that really And just returns want to So see on just the that. quickly.

Yes. No, absolutely.

The an economics we environment it, move a payback great is are period in than And noted years. And still this 'XX. it of XX% has return of fabulous, a less so capital. into it's still and great strong unit still very as X use Todd new

cannibalization the change And any the is other that seen in haven't thing rate. we

out The other General I'd fantastic just point this. and thing Dollar is at

pretty and seen Our have amazing, an we years. over rate real hit success high of estate that the and is you've extremely group

to course, it to with fashion, work We of and go feel the we improve Dollar the that really Todd good while of all So pleased feel as good 'XX. noted, about XX% as going in about through return, projects. we're typical General we we're

with is from Sigman question Seth Barclays. next Our

I little inventory wanted about to bit. talk a

more us position. Just bit Can progress versus sit just little in inventory terms perspective you the rightsizing give consumables your of where you with on nonconsumables? a today

that influenced around question the next your like to it to When Or at And year is clearance clean? I'll you the feel expectation and extent the year? look add months, just improving top markdowns still few do And to by part has then then last second actions need the you exit you're line. a activity? been what some going the to incremental trends into

the it a question. we and priority ours year, into a for will year. thanks next move No, of inventory Yes. be And reduction as this is absolutely priority

inventory about just quality what is and a the talked the lot we've both of good in reduction past us the benefits reduce think distribution I the that is news in of does stores and the you inventory centers. as our for that but the complexities the good,

on would our say our that the a in efforts, little numbers So progress of you bit reduction saw today. is I in track and

total a But you store we're on So if was basis, a inventory on down look year-over-year at X.X%. X% it increase per basis.

is the I think nonconsumable real the piece. around here story is,

basis basis. we year-over-year are we're store down there, XX% and a a so on XX% on down And per

product out, it that's that receipts. us again, in other important one and thing more sure is and it. making as that this I import call seen XX% calling we've significant And out to our the selling around we've decrease every we're but quarter, been think buying a through even

year. we're good for we headed of end feel the about so where the And

the going place Just the sure making where customer I'd a several working that and work that kind term, us this inventory go. streams inventory we of and line little wants say we're but have as reduction, in are bit important, goes just top to is optimization to longer on

landing improvement in I but so feel feel we we're move the with better say about 'XX, levels inventory of these as at all would going as place, good we we're pretty in And see things of 'XX. end even should continued we through where to

Kelly. QX and around to I in good tell you our balance would about here. very that any this clearing Thanks, look relates how And the you feel results at inventory, I as activity that

activities the bigger While for there was needed. some of is actually, some QX, really activity there, if slated

sell-through holiday. our lot a will of around be centered of And that

now. right in So that watching right we're very some it we a line thought where areas, early again, better. closely. in it's bit little actually, be results But And say would would

we've forward, also seen So as that I continue exactly this some we move say, believe of I've watching what carefully. what we to would on But back, right we're inventory. moving I've done is I through the like and since thing been

to lot an of core But look what actually, on deal the at of as it just our as shape. goods. actually quality we And right in I indicated, a is overstock now everyday basis good more with inventory, is very Kelly our in have

right that screw through, or food-type what back we bunch have paper thing things about chain little isn't some do bit items address. to with the like and of items, meant basic basics hammers this that our about that, that's the move long naturally exactly this and and will our is fashion-type move to much too to So stores, for the as through drivers we a system cleaning, is of pretty holiday having a as supply

So good about very the year 'XX. good about into and half of very this feel back see we and going that what

from is with question UBS. next Our Lasser Michael

Welcome back, Todd.

done General's growth of as has us to consistently texture you to are pointed producing double-digit going like like outlined give to Could getting incentive on for few that XXXX. algorithm shrink? hold timing large compensation in the around that more past? when realistic those this back factors that, profitability factors Kelly EPS and are to Dollar is and part it outsiders General Dollar a team weigh how a And everything accountable morning, in Given the to as

Yes, thank Michael. you,

and we're longer supply feel to and merchandising. labor that back in said, customers. both our and see both investments our as in of have ways the our Kelly don't chain return I right we way gets the our our anything getting in I our both basics inventory in term As our some historical track that that well investments, to We here, to shareholders with on moves as back to

speed So we and taken and moving the we've we're right feel like with now, intent. appropriate actions

But in and As take we remarks, prepared a it I of some and said we're single and little hitting my rest will will faster some time. occur bit more every monitoring we itself manifest assured, are sure that item, week it the happens adjustment an every way it's item on make to here does. not make right want, to the move And will single every we track. if to ensure then it

seeing. that store used its accustomed seeing We level. are this squarely to most focused customer company our everyone is at is importantly, back And returns to historical to on getting

there indicated, Kelly as near-term some Now headwinds. are

now, As much guidance. love as we're not 'XX you more right to I color give to here give would Michael

components the to We we though the can assured, can we the those for to when of start you you at models than rest give need proper make to least back we're and guidance out sure but more wanted you the as to contextualize that into build give XXXX some headwinds move come XXXX, you way. you in that sure make going

more till wait of to may that any action But to not that that 'XX. in though, gaps are probably time. again, also we'll I fully control addressing to 'XX to in want a will be continue just continue the that that now not that address There'll things taking be nature that to a we're we're the in are in our at there make and sure out right few you ensure modify onetime be also well of understand, control. going We're our

with McShane Goldman Our Sachs. next question comes from Kate

And as across We were wondering result? your about the do of risk and box into P&L the the year? deflation how you think puts takes a next frame you would how across

certain in seen areas. especially to in been us there's Nothing And deflationary alarms deflation. opportunity we question. also up, type that not How pieces on reduce good especially XXXX. import-related up a initial show point That's the only the a our side. is some at starting lot as discretionary for looking areas written it Yes. We've our move costs, goods, some real factory, see we're into we this to from but at in transportation nonconsumable

fuel bunker such the cost, fuel moderated freight, year. cost have greatly last ocean over and So

some out. pull opportunity cost there's So to

Some areas, we business our there's side commodity commodity-type of the that, because continue always will nonconsumable we as good in to of some some on in those are items areas import -- watch, in definitely even good to the the there. pass especially there of consumer

commodities: always type there's dairy areas that oils, while movement perspective, watch we consumable carefully. areas, those very in a From milk, wheat, of

for We pricing that component national and at have our watch We our here private brands, but closely brands. we very that. Dollar only monitor General not very,

a seen not I -- dry haven't paper, point shows done. There's in at little meat you alarms very of player a we've we're affect on would will, grocery, we store, top chemical we bit that, move that. deflation that as saying little into as little indicated, A huge deflationary if Produce, in this that in. will nothing very, center pressures. But some those dairy, I we bit least line us or commodities player some a again, Now believes there. in totality, it tell adversely items, which the 'XX, in don't at are of in what there nothing you,

from Chuck Our is Haskett. question Gordon with final Grom

the issue been few the quarters? improve talk you believe past that perhaps Can quantify you're pretty little taking as measures it's I to comps that the and bit Todd well. out-of-stock to the back, issue? sizable a and probably Welcome drag about it's over

that's if interesting. say, how an big long wondering average and was And today? of then And an I number you optimal in be? could you in opportunity back store SKUs to back an level? how to on just the do So take that of have SKU get you'll maybe XXXX the relative to rationalization, to speak can you think

are I've of work that about so amount the that. are some There we're store where many streams feel I we here seen been and sure. would headed. the of are tell in that have in saying I underway, probably good Yes, you that stocks largest out that the I've Chuck, now our XX-plus years of

rates actually indicated counted this As our inventory system, inventory inventory. a few our but in-stock ago, I level. not just weeks in our has yearly we store moments Washington fiscal inventory perpetual change over And our a takes that on last saw are our X these meaningful at the inventory -- from just group

you but will, all. the real just of out it So consumer stocks real shelf, and these of not stocks on are at system out counts, out for is the in of so the stocks room, back if the meaning not in too,

we a saw in to that, So more consumer. available drop the meaning meaningful

we accurate to past. I go and mentioned our first the in earlier. keep inventories or the General We further and inventory quarter of we through make putting advances. going believe role rest the that Why? even the hand to we're this hours move We're in a This specialist that Dollar ensure on into is meaningful our for as we perpetual more than first, toward have

a doing past, bit the this to a little up every and different it, have taking activity a a come this we in the at fresh done are at in weekly We've store teaching and at SKU. it, that more to a do on but touch of a with look of way, we areas training time we basis ensure approach fresh individuals

and once every by areas once a the more And higher velocity the the of touching month least month. than department store a way, at

the So and some pivot adjustments be we feel quickly feel direction. We able to here. about we good about will make how good

got right? larger you in got -- Now our rationalization said depending and past, than we've on store I smaller that side. the and XX,XXX on today, some XX,XXX SKUs know, we've tell SKU our ones. the would this you format, We've between as formats, the in total

I'm the I opportunity we that. at looking meaningful take right in how tertiary of we're it looking that believe areas now. at from out of number We're you an number to And that again SKUs. talked about the secondary earlier. going But a have it type and is not we to give still midst

the looking to areas so GMROI approach look fresh of shrink it of of and due is and standpoint it a way, still it, There not into at taking store profitable? our lot so control. only we'll of it it to is return, from though, And the elevated, With a of shrink well. not that go from SKUs a may other amount also are standpoint in some that components And right? in SKU. control, to there also, a by a be but as our -- shrink dropping be look that We're being at our the SKUs in

the to a look be supply SKUs mind fresh first, it's profitability stores. across throughout with consumer chain the also mind So going the carry in in but portfolio we through entire our

more come. So to

little the it was meaningful on efforts impact rest if to number to SKUs a contextualize think a of assured, I here. we're I both this give you about bit it I our on wouldn't as progress meaningful how believe stores. into talk within and of be can But go about more color we next QX going well as meaningful maybe simplification we as a talking didn't year our

the closing session. have turn Todd like the end of for over question-and-answer to reached comments. We to now call the I'd Vasos back

back. all words you, and me questions the and welcoming kind thanks for Thank for your

the has last career, that this professional serving of I today. I feel of been and General Dollar said As same my team sense at year highlight honor the

We've we've possible. we excited before, front morning, great and you over it As you it that and so what have for hard about years set associates the ahead you customers, heard a doing I will of Thank all know to as work as shareholders. opportunities on of do hope listening, us have and and this we accomplished to our but I'm in done do. together quickly absolutely are some for day. the us again yet continue we and

today's conference. concludes This

and thank time, You your participation. you lines this may we your disconnect for at