Dollar General (DG) 30 May 242025 Q1 Earnings call transcript

Good morning. My name is Donna and I will be your conference operator today. At this time, I would like to welcome everyone to the Dollar General First Quarter 2024 Earnings Call. Today is Thursday, May 30, 2024. [Operator Instructions] Today's 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

would of turn Kevin to may now over conference. I Mr. to begin the your Walker, Relations. Investor conference President Kevin, you Vice like

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 that you comments forward-looking the today's statements as Private to not defined about about strategy, Securities expectations that of Let financial me caution 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 reports and subject XXXX projections. those earnings morning to call. this our Form are in could issued results the in our identified and later filed materially XX-K actual made risks not any that comments under expectations on release include are this XXXX that and but factors XX, our limited in filed to Risk uncertainties March periodic

as as to the questions will yourself end address up for in call please speak not revise in General the many on rely should questions. statements, we your allow our as unless required open update prepared forward-looking question. call Dollar this You today's to of any of To us the At date. disclaims X which remarks, to unduly obligation limit discussed any possible only or information law. by queue,

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

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

our back well entire our the of of start I to the year as of call, our the and Dollar performance an have will highlights of well full On getting get begin to financial up QX at our the business. work our want update today's the QX performance recapping then I wrap our our to the as XXXX. plans they QX that, great recognize General. by I We as will the embraced details as our some for to on will in for call After some an fully as on back with are basics plan and Kelly And pleased with year. outlook update basics of work share sharing across the the team of current

Turning number included first X.X% both $X.X net to compared our accelerated quarter billion results units sales to of serve. to product in the product sales. share market communities in quarter sales expand share quarter. XXX increased These and ability market growth consumable sales year's new highly last are to first in performance. well our during continue nonconsumable in to in QX growth and stores dollars the in opened about We Net $X.X as excited billion dollars we as of

increase by offset work. driven was and transaction fewer amount, a X% decline strong growth average traffic The primarily was more per sales and than result the X.X% Same-store of the which to Dollar sales ongoing communities in General QX end the increased during a guidance. was impact top consumer Back items to Basics in comp testament of partially above basket. driven this in We believe relevance of the our our positive of quarter, by is our by

March, into including their of the growth Easter similar families. partially a in and year the by consumable was February on in moving cadence our home, This months comp seasonal relied while increase growth often a April of from the by declines for need items driven customers value for the was strong in The was they most relatively growth and and category sales apparel offset perspective, categories. this April. in entirely March From was benefit strongest us of

We believe their as in our value-oriented on of at pressure in accelerated customers engagement QX during private share the the we which their well a point. brand feel below growth reflection the category shopping in with behavior, or manifested in continued very discretionary to as items core in be is see the spending. price sales softness increased They $X continue sales

Importantly, growing adjacent our and with we customers continue while middle- trade-in from to customers do core well cohorts. with higher-income

trade. continue And significant good for among pricing wide position a proposition competitors presents classes other relative about very our feel opportunity our ongoing of We to growth to and value range customers. of

customers even Looking more customers and for in be important face the when multiple their stretch ahead, to We most dollar. expect positioned to that to we ranges. economic well help they are continue income consideration know our them we value us need challenges

of help stores. across in our on within the around on focused turn brief our deliveries business most on are self-checkout and full strategy to ensuring I efforts including we we are significant supply reduction and on our our to the provide end-to-end Kelly, in and Before continues shrink efforts, announced I want are issues call the merchants shrink, supply in including To headwind March. primarily deploying time in approach to update to to combat merchandising be the chain, our over inventory Shrink and an reduction organization, reducing shrink our the changes a our we that chain carry. amount teams

shrink stores, broaden the of high self-checkout and our stores. include the focusing delivering reach of SKUs the more high our a removal in the presence, front-end vast of are elimination shrink we planograms, Within of which majority on consistent,

away converted As approximately the stores we self-checkout quarter. from during discussed quarter's on last we call, X,XXX

challenge conversion completed in shrink, XX,XXX X,XXX stores away ongoing in Following QX additional the stores of successful May, from quick we these from to given us self-checkout approximately in approximately converted and total. and bringing the conversions

the change action also in expected back the shrink 'XX While is customer drive of to believe course in our of us a begin in positive XXXX. half we better material stores, increased a engagement this impact significant reducing with represents right to this while positioning more

plan locations. pleased are in we business options quarter, more self-checkout available with which and the volume of discuss the number I to results stores, we the forward, of have most in later. Overall, detail during a limited progress and which first across are higher Moving will low-shrink

We team the and of is excited have lot doing. us ahead a we this about of are work opportunity

Serving goals. We we our of provides have that a long to history serving Report, of several published in economic value distinctive thanks of to important our also a environments, updates want convenience. customers ongoing and efforts which combination I variety note our ESG annual on Others recently and

call of are the back U.S. excited we we focused within essential and approximately basics able about uniquely to and remain miles support an responsibility shareholder shareholders. associates, the great as customers, communities many to We we enhance on and develop everyday to long-term General ways create partner are serve look population, serve locations X and we a the of value. further and positioned getting the XX% we recognize with associates We have the to our country. as low the we store our customers are across prices And Dollar of customers, and to communities way serve the home communities

will call I to that, turn Kelly. the With over

morning, good and you, Thank everyone. Todd

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

I'll As Todd discussed profit. sales, already gross start with

was These mix the to provision. This most headwind decrease consumable QX, year. first decrease to XXX XX.X%, points sales was as quarter primarily compared offset attributable and markups. a shrink lower greater prior Shrink in and a partially percentage and were gross in basis of a markdowns, For lower profit points. XX significant by was of to inventory increases worse sales basis LIFO be continues our a

I'll multiple actions for year. noted, we our we're levels to levels, promotional the at expectation As the aimed bit. for anticipated more discuss XXXX a And coming similar Todd markdowns, just taking seeing regards as we year the of into reducing headwind remainder in to this With shrink. are

and are on items strong seeking noted, take saw As Todd the during we customers value first quarter. promotional rates

of XX.X% was percentage compensation increase an incentive and repairs retail Turning depreciation labor, maintenance. as to amortization, This increase and points. basis and by it was driven SG&A, a XX primarily sales, of

income operating profit the for quarter million. down $XXX the Moving statement, to first decreased XX.X%

profit sales, decrease X.X%, was basis of a a operating of percentage XXX points. As

$XX for to interest Net million expense year's the quarter to million in decreased quarter. first $XX compared last

first higher compensation. the rate-impacting rate quarter to in Our primarily This rate the lower due year. XX.X% and of to certain expense for to recognition quarter XX.X% effective taxes tax before attributable earnings items last and was on effect compares stock-based the is

the XX.X% to decreased Finally, end EPS internal for $X.XX, the of high our expectations. exceeded which quarter

to a of store inventories Merchandise flow. a QX, cash and at year prior sheet balance end decrease nonconsumable $X.X the XX.X% to to optimizing per Notably, compared the simultaneously a of to of decrease now Turning X.X% inventory store on on mix reducing were total team billion and basis. driving decreased great compared year higher last end XX.X% continues position a do while and The overall basis. stocks. our our per inventory decreased work and X.X%

up our important more believe this risk. only from operations an during The XXX% but And increase further not with to cash million the inventory mitigate our we also progress frees helps flows importantly, improved to significant the through good. pleased of the cash which we quarter, management. goal, in working capital, inventory continue We're primarily on of quality shrink as remains business generated business of the $XXX

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

progress improved returned of During we common flow through and we're our $X.XX the payout customer outstanding traffic market and with quarterly a cash share pleased from of Overall, proud operations. including shareholders share, in gains million. quarter, $XXX of for total per inventory and levels dividend cash results, lower significantly a these to

financial Moving fiscal for to outlook XXXX. our

year, the of and the reiterating our With early Back first financial in $X.XX. in in work. the X.X%, our positive communities of While it's as range reinforce continue importance well growth the sales to net as we're we X.X% results to serve to range range believe expect in growth our the sales of to $X.XX of mind, of guidance the approximately for to X% same-store and to the in we XXXX EPS X% Basics progress our stores that quarter still

impact to the tax This negative in to guidance an XX.X%. due range estimated an and continues higher assume to approximately XX.X% of expense EPS incentive approximately of compensation to rate effective $X.XX

capital billion as our billion a expectations drive capital. growth. continually result, use for the anticipate to We $X.X to this in And evaluate of optimize continue of invest also real the to updated in XXXX. as We estate have and seek we ongoing range spending we to $X.X projects

previous our reducing to now of To of We compared in to expectation approximately of remodel this expect planned remodels, X,XXX stores new increase the previous we're stores. expectation to this X,XXX XXX to compared number XXX stores remodels. year facilitate our new

In and to the investment expect We're expected reallocation we stores estate from continue our this project to our relocate in excited XX is increase about projects of stores. total, total capital. believe X,XXX this an increases real We to X,XXX. mature this and appropriate approximately count expanded in our

believe As we continue and a reminder, our well. serve capital allocation to us priorities unchanged are they

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

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

EBITDAR, target above BaaX. debt-to-adjusted of ratings, although current are in BBB our and are Finally, support to reminder, approximately a focused we our Xx our on commitment ratio leverage our of which, adjusted our credit investment-grade metrics as improving currently debt is

our me outlook additional provide let relates for some as to context Now it XXXX.

very driven move we sensitive be to continues continue we through value be the customer will they Our as year. to anticipate and price

expectation. as sales mentioned mind, above the continue pressure I earlier, and XXXX. seen reversion prepandemic to we levels original promotional With this be have we in mix move to environment we to as expect our expect And throughout

least gross the headwinds at through first such, we promotional expect markdown will to half continue margin As of the year. our

earnings expected and greater initially in into March. we what is call to in Todd be financial in trending was we XXXX provided we now coming shrink expect guidance the headwind noted, the worse than As our this originally contemplated on currently year than

the action taking later had challenge. anticipated see previously and to XXXX in aggressive XXXX. we of this We're significantly into half more decisive improvement and mitigate expecting we're than And back to

Turning to SG&A.

our on from are expectations previously unchanged Our relatively what provided we QX call.

continue from a and compensation headwind significant normalization anticipate headwind the well as We XXXX of in incentive to this amortization. an as from year ongoing depreciation

in we of some to somewhat our end, second To the quarter. year we in given guidance, comp approximately pleased more range exceeding low cadence and sales solid While In with to summary, typically of and increase EPS on in the including for this line to specific quarter, headwinds, that we're year, of first quarterly X% range quarter. detail $X.XX. its don't providing the atypical expect provide $X.XX expectations for the our bottom the our the top second we're start with expectations

our the are investing reinforcing We with as while foundation position delivering the financial resonating and customers, our strong of with future we for believe in term. how consistent, our growth. and committed expenses actions our for remain our goal strengthening We operator, strategically capital to maintaining discipline manage a low-cost long competitive performance,

meaningful including and plans flow resilient operating strong. growth, shareholder is drive value. We're We the strong this free healthy future same-store business, store of new long-term margin profitable about excited continue believe sales this returns, to long-term cash and to and that model

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

you, Kelly. Thank

X profitable empowerment and of to continues inclusion. our through investing as operating center focus Our a operator growth, development, on growth and leveraging sales in our key and position teams capturing diverse opportunities, our low-cost priorities driving reinforcing

enhance to discussed in advance approach refreshed associate and the to a in we near stores. term, store the have we experience customer to the getting to priorities implemented have and back standards As our these basics

the stores ends update take with will merchandising. begins want next supply customers. provide stores, to I our an our efforts to and in I on our minutes everything few start where for these and chain,

of presence end our front of at have also we while level to welcome a provide facilitating checkout prioritized the employee experience. reminder, friendly stores elevated to increasing our the positive engagement a a customers, and As

of the we focus As believe we stores, have growth. and even more customers important in majority self-checkout sales serving this continued to move our supporting our away from in our is

in by our specific store. of management management more hours inventory focused adding and specialized training additionally each perpetual have stores specified on and in shifts inventory We labor our inventory

note taking is levels, have contributing believe as in-stock their we our significant Our in traffic, a customers in improvement are sales. comp customer market and seen we our share of these perception of to efforts which growth

also associates Finally, taken while make operate our a easier stores we significant enhancing to to for overall customers. it also have and the action experience

chain done in and control, simplifying as supply teams we certain spans Our in the merchandising stores significant field, such to made strides in activities district serving reducing work reducing and eliminating have addition have of manager our inventory. the and

do, assistant focus to sales which store director, associate. continue turnover, operations, to reductions shrink work on store while retail seeing in district levels manager, results year-over-year and We Notably, correlated is we reducing including still store and our manager are turnover sales to all within in our stores. we regional manager, have at manager

resonating We team are the to actions progress this our in proud excited of field. see and our with

employee stores, and and and drive sales customer in believe drive results, shrink. we associate including improvements in convenience, in service will including availability Overall, improved the our financial experience customer actions the including the and engagement and enhance stores improvements satisfaction, on-shelf retention in

provide supply update Next, our chain. quick let a on me

priority top OTIF. to continues in-full be area to rates this of we truck and Our deliveries, on-time our in refer which as improving

lower an identified and distribution last supply teams to time Our their led these XX our our Basics OTIF flow action aggressive significantly to last and we levels cost taken to higher began inventory warehouse we stores opportunity our Back same chain. work service compared When efforts which have year, transportation temporary year. have improve to exit the to and throughout facilities, to would improve

remainder are in centers great exited making exit Since these track are X on progress the are Colorado, conjunction transportation later these time. this in permanent and of we lower with buildings and year Arkansas stem and XXXX. in reduction have open to a both moves, In on in to our that distribution should of time, scheduled we to costs and which which contribute over and miles

sorting centers Track process full-scale distribution first of of Fast also since refresh XXXX. our our initiative the in we the begun have our launch Finally, within

Work completed. on X already dry begun facilities XX our has all of with

by and believe actions of believe for this sales. on-shelf and agility be further driving store end the to to we availability on finish customers are and of customers. teams the will we ultimately and and our quick experience increased conclude we our re-sort work our others respond will we year. able our the greater Ultimately, process, store driving enhance Once restock shelves more chain, greater believe progress will efficiencies allowing We making while the quickly quickly, the challenges, a us these for teams to demands changing supply meet all improved

to to merchandising. want provide Back getting in update Finally, an I on Basics

Our continue we a These the ways to our value brands delivering basics to to to always affordable provide important customer, are strong the $X is remain at prices. they innovate products brand want which point. is we priority and price offering, national need, team's affordable the top to and customer why and committed private on

the pressures experienced $X in each our the approximately at to last every in our as Despite we the stretch X,XXX over we items continue year, help of and inflationary stores we dollar majority have below price stores point our the their customers day. or carry

way we a In of continue chain our well focus our an done to our X,XXX this front end that of meeting and are also outstanding team job Kelly past meaningfully committed position the the to reduction up net noted, on As by year we and XXXX, on this goal. within to the SKUs on over has inventory X reducing months. we to

selling made the inventory to stores. items We these planograms resetting already remove progress our good remaining and have through from

of transfer our SKUs offering. sales secondary the that will expect will a and portion SKUs primary in Importantly, to of the we remain significant tertiary

and as execute chain the working store merchants floor resets opportunities, the with Finally, touches process, optimize have can teams. for our to identify stands within number sorting conjunction the our go straight number with to and working our reducing for simplification cap need merchants of reduce to on supply to such eliminating our work the teams monthly end extra the our shelf, the increase of of been products activities to are also that store. operators the In

ultimately these time our save Collectively, and improved associate and our customer in to teams actions designed experience. for stores result in an are

great as am I how of As up to getting want mission say, Back our fulfill we this we Basics to serving team's wrap others. to I morning, and proud the of commitment again, work

to moving to plan and are We with to that execute great urgency matter most Back customers. our implement the Basics on our things

This And some while continue that I of many for than we'll to we deliver take actions, capitalize to are on stemming pleased our to employees with of positive may opportunities. these thank to want these intended the results our benefit efforts work recognize we and from XXX,XXX longer the more their XXXX. team our confident to ongoing value to their term passion I accomplish and shareholders together and and both energized to that operational restore customers all engagement can is customer. alike. near look our our deliver throughout and excellence we in for term forward strategy, for long

that, lines With now the questions. will operator, open we for

first from Michael coming is Instructions] question UBS. of [Operator today Our Lasser

It's question. a multipart

while about margins your announcements does you from the to has talked expected? the have gotten of in what's all your promotional environment What That's the given in offset been And EPS to the who've worse have why that to the half First, investments. maintain able how to happening able second shrink more year that surprising than as create intense. guidance? that competitors price similarly, is you year And you full might marketplace? still respond not mentioned you being to risk

you thank for the Michael, Yes, question.

has sure Basics to quarter called our shrink, those little we the quarter talked longest want a we longer We it. being back itself We tail the as out last few just that in reference rolled on last So some last out as to program of areas manifest a months. in to will take over to because positive real Back one shrink shrink make earnest about manner. I to

we and is that, that many as every way, to the indicators watch we the frankly, that would by years. is, is, the proprietary have quite that great you at on years, And use watch here thought a pretty, right we've front In model over look saying now in the on seeing shrink shrink each we would. we up know, recently. this thing what manner that shrink we And we at indicated look had and performed what pretty of our and have shrink levers have quarter. for predictive the this, we good many and indicators And until we're a

predictive the are with we flashing now or items models And for that majority of these shrink. at positive green look the

that what a of for indicate 'XX in year that nutshell, beyond. pretty about So would will what that, in half the we good and saying feel indicate hopefully and for back the

thought we to come little starting see really great but is would again, like Just in a together, shoots, softer green it QX which perform. to

And want overall. may the it margin to Kelly, mention you how just affects

Yes. No, absolutely.

which little in takes it a financial So our calling why is show of for to results, out. improvement while it some that we're up

do to that. and into of half improvement we year we in through as expect the more second work even So the XXXX meaningfully see

I think are question we of any to those work to doing risks. your what just was offset other

typically do. we have lot as we And underway tell a I'll you,

always is goal margins. to Our improve

than near brands drivers got include our of way looking Media and and just national shrink for in as here certainly Network, to any so management, work is a risks there. we see We've huge of the underlying which some consumer that looking of some Category Dollar we piece certainly offset brands it's have the term. that the that the which so generate now. General we in sourcing. something at is meaningful global some And through better still place still margins We for have contribution private DG the

as look year. just for the this chain optimization, inventory move efficiencies And job move we frankly, supply every finally, we of year then, continuing to each and fantastic focusing of And on. as team which those through and a through done has efficiencies. are Certainly, course, we

all term those Basics our strengthening of for we're shrink, and So underlying driving long year. and with on to of half feel drivers that just the on the delivering we the actions into Back sales and I lowering good think back foundation that

then, believe as probably time, that to QX, activity XXXX. in you as And a And call more a had seeing and we believe what out you would going that to we're the recall, it so environment pre-COVID may of Michael, know that question. exactly type are levels. reminiscent one the the promotional We first second that, we promotional ones XXXX I to relates rise what part from to mention made be we it's And in saw. that's quite we frankly, that

QX still we we of move half as into back the the And same way, see the and it today, year. through

as So very it's here much thought. good always at for job, of we've we what to really us, General, in everyday tell promotional right anyone. more as We as you consumer. I activity meeting to Dollar and would show And everyday you that value that seeding probably that know, value a done here on on even price pretty then our the that good the do balancing shelf,

help Kelly is And to mitigate CPG to closely, with Dollar about opportunity in we activity. player allows category work continue very company us promotional with management thing great from them the that that And a margin are risks almost every that, mentioned, where that with large America. to General the just

value it's for very transactions the well a we and good. Take And our and promotional good here. that So show think move feel the is is for quarter feel the been resonating. good to consumer. at we activity our quarter, look we I guidance about our Everything to in sales forward balance the struck contemplated being as

is JPMorgan. Matthew question of from Boss next The coming

Great.

And saw progressed, your as what Xs we discretionary? you relative first quarter on Basics that have second where about opportunity, the could far near-term so said, May little just strategy as you customer guidance? that So seen Todd, low picture, maybe may today things I'm about trend to in the behaviors larger Back think you And longer. Maybe to then elaborate opportunities? does stand a relative then quarter consumables overall as comp to bit just you relative thinking take to the

what what out income to the it. the Yes, best value, the what that She consumer, cautious especially a definitely in called stratas. March. and the it like seeing the so come then cohort we're one some call in the the next above the we're is down consumer Matt, in. put in what the, middle that we're Well, is sure. overall QX, of income upper is I But And pretty seeing, let's seeing to middle in has still seeing from well we lower we're way is, that, we trade -- think, upper and see it's saw income stratas,

is high and we the #X data and of taking that of shelf that in is her good a those see retaining priority. We feeding strata. definitely at and we're the we're customers level that family store family So can trade-offs getting in. core our She at her new feel making it in and customers ours care her in lower income

her. Inflation of mind top has be and for continues to

know, away. down. is out the she what say of does that recent in pointing our to inflation talk overall, and the there. gone she quarter that inflation over does has in work, year-over-year, still happened years has But keeps slowed out you While we as is couple recent hasn't last each consumer, to our work, It indicate the she the her go

as if base, move dissipate continue as is will. the of a probably quarters we that, we going forward. in couple pointed to to it's you out And don't ago, that we believe So had

figure spending is continuing consumer to her core rates. our overall So still out

to saw side And QX the Now, non-consumable as moment, both the that talk times side thing wants what a nonconsumable and very was the we and the about your great the when versus consumer Easter in second of for is that more, question saw equation. good let's in discretionary us, for consumable was we consumable mix. asked Easter on those spend of

she to the she's spend very that has ability spend. So but some deliberate with

we value areas. in even to show the so discretionary continue to And need her

is to is spending that that to she because her some income she So on that out signals of continues what discretionary. figure levels us

we that continue far. to And that thanks we And QX. QX Basics our move Back guidance done beyond. to lastly, for because fully so then in Xs as it's what we'll in our proud and of work, through believe So contemplated gave on low foster asking that we've we're we

recall, you my moment, That's at crossing at line, to that as QX. about XX-yard we're football starting now If tell if own talked back analogy very you our I the quickly. a we would revert XX-yard we can or exited I for move just line quite about a

few moving asked, tell what line we're you the the even past happy a components chain, quicker, other XX-yard more the you has with you so would and on supply our side on XX-yard there, field. seeing of the tell in I the of well very line and moved would I are probably

So feeling that. about good very

in-full Our very the really on-time and top-notch weeks key. been now. many rates and is that for stable have And stability

you materialize to for me starting the saying it see and last most. start weeks. remember feel been that to it we're customers last have few And that that stores If is the the consistency the where time, and feel

we and our some biggest the the merchandising QX. as side, I XX-yard All of QX the tell benefit And see has starting As well line here. into that. we're are as come it components relates you, for would already we yet laid worked that pipe to to in with QX our some in been squarely of early to across

itself I'm field, everything we've our what our level. store in done operations starting our is at Because very then house of so back done proud of manifest to now of they've far. And stores, inside

I to happen we going that well. I so the is in team the there. the with back-of-the-house focused squarely as that And that laggard be you we right squarely on that's still, forward. that we're see XX-yard there. now, field down Shrink would line the moving And believe the indicators we know believe that would QX is laggard. it as ball I on And as probably knew move indicated, tell the We I there the

for mentioned tail those we year in I to occur. of really full want starting This surprise is not else. transactions. guidance surprise, because sales a positive don't minimize shoots confidence to green not the QX course, to those And than worse a us it's some a we're that give our see reiterate that. overall, going I and little of to everything But that earlier again, thought but

inside consumer have last the positive take big that be difference a in and seeing You to the A of our turn quarters. over the very of because look difference stores. is at couple

So stay tuned. We feel pretty good.

You we're could seeing we're some enthusiasm that the work probably by from tell doing, real my all positives the Matt. that voice in

Goldman from is next of question Kate The coming McShane Sachs.

this growth? just expect you time. store remodels could through longer and point is change estate we in priorities in And maybe between estate in it you're if breakdown why terms new changing The something term, real wondering should this for at refreshes, the plan, talk of real

of And year. the we Thanks move just Yes. is question, And into number to level Its's reducing are XXXX. we're for everyone, so about the do them new Kate. stores to XX going stores. this set by what

XXXX. just count have. And them up increase So pushing to we free that really out the project of estate total and number order identified. does into the we is feel we locations what that good the have remodels in capital real We're that about

have with Basics think especially I mature investment, absolutely you, our reallocation in of stores. And appropriate our tell capital, to particularly to is this we're expanded really we projects the So in with work. increase this Back about excited the

now, really this reallocation. so for but right feel good stayed And about XXXX we tuned for

coming Gutman question next of The Simeon Morgan Stanley. is from

Todd, My X% north time. And question talked longer-term is back on about margins. we've getting over of

given investments? of different consumers question. a part do how things The in are that and slightly margin promote fit are what you you're I'm think about and and but reinvesting? And promotion. looks, there now the business need of the appropriate -- of it just mentioned X and some a that closely there that months maybe Do are got seeing you retailers, margin think but are things months you little not maybe at the takes the that more You've puts on those buying and then environment that on the actually margin, to levels are reflecting of with does the investing and how structural are now are X you have How level make shrink just second that promos. you on price? business that actually, worse price sure now bit some watching

let one over question. your question. actually I'll second turn the to Yes. me for you Kelly first Simeon, the for Thank it answer first and

react yes, you QX, environment well. we they're would in And little the units QX A and would what tell is to the looking way said So thought promotional move but exactly we CPG be. nearly again, knew in the this knew to would going was this we is I it higher because that as we the react. way consumer

is tell of would some and into this customer a CPG push I activity. So you probably promotional a this that both

price. saying in that, Now great our about feel everyday we

As all I remarks, everyday price indicated in right in are classes line trade. the against of prepared we with

and and one feel private shelf. invest has our frankly, the thing solid best good important and keep to to magic continues continually value our in growing, about been other And the we brand point at mind very So quite price growing quarter. is of that then and And in We that. business in performers stable be price QX. in expansive the $X

at value So showing point. for resonating. with all it's you think across growth the mean say resonating consumer and transaction the one I it's heavily I look QX, this when we're that spots different at at would consumer

continues we board through So about it. be, We And move we We'll team to we good in is QX this watch strong the customer XXXX need now, we and continue working know beyond. that all as how We'll the long exactly for but and like General. classes to the levers would. to if we Dollar a all do here of watch have thought reacting management she continue right this. category do adjustments built be that how make time. pricing know to to here doing been at continues we all our We've trade. feel But to this of be across

longer and feel fundamentals of this lot sales We're had doing just minute driving Back our ago, shrink. we're just We're longer-term everything taking growing for generating lowering still the working talked traffic. We comps certainly a growing we great growth the and Basic a cash. about And healthy with a look business. term to this Yes. of foundation with and share. we're at actions good to that We strengthen on about

So the model is absolutely intact.

have new a nice As stores we for runway and look still long remodel growth that's and forward, our program. we

debt about good investments So the to We be and future. the that. reach how of And of feel making cash as we look our we'll that about feel in of returning as return flow we're of cash that form to course, shareholders share our target soon now the good business in back generating then, leverage, appropriate a forward in when will the we significant amount repurchases.

have that, we of all an we I from where we're given margin. so say our right at perspective, always we improve lot are operating and opportunity of that would know now operating margin And looking a to

operating also talk huge me the a longer-term shorter controlling things. of levers benefit gross of approach margin to well. to we that term a is around we costs, drive Save heard our You about the side to Serve lot and some also have which in margin the But as have

like going plus I can term. from growth return to we to that is feel longer So would adjusted believe XX% over that the business tell this to you on we we an certainly a basis XX% EPS And here. do

The Citi. next of from Lejuez question is coming Paul

and assumptions the have you that for I think nonconsumable a talk changed? said I shrink the in it comps of for you thought categories rest of little business same assume than bit less those the and the about thought. Can for is the promos. you maybe was also a mix how the year drag you

help just are what guidance. curious as keep offsets your the well So to there

just, those would nonconsumable But the business, I when store her the in at well. our important shelf. you, again, to and would I times those I mentioned and tell is still during as It's making the it's she Yes. trade-offs that ability discretionary spend. alive you important tell the family, earlier, has consumer discretionary is to

areas, do. right shows -- some is price. you And or at that activity and believe we have for and consumable QX the as confidence me, to gives that our right to move in right like So promotional are and layering through the beyond, the products we we core consumer thing us we excuse and in probably continue the that discretionary value

a well. of coming I'm pleased because help we've about the the believe we lineup back looked strong seen this lead discretionary nice I with the got side talking I the And consumer the never as know the such of holiday and will in. little we coming has the for premature very is holiday seen a balance So up. have -- a engaged it's it but at it you stay of when start business. very half -- both lineup is long year year time have in

the move and side believe come. to continue business the the more to building the through the blocks So I got we've right healthier in of discretionary for we to all of year. half healthier place as get back

The of next Rupesh is Parikh coming Oppenheimer. question from

to the back year full guidance. going the on just So commentary

a second it recovery. strong So profit pretty half implies

and the the want the back half year? the key a in I the acceleration through sense confidence So guys driving just of of drivers to out get as look you

our And does bottom we to we are that able of Back a to on your I and certainly forward our half half. Yes. pleased really back our we say fuel all strong be half. will indicate guidance And gave. that stronger the see growth momentum to Basics Rupesh. back would it Thanks, of back work in reiterate to actions to line the looking and top a line point,

The Seth Barclays. next coming from Sigman question is of

there models about green. also the it only another a your a worse bit is comment Despite to answer about being prior And then flashing was little internal expected, sounds was comment shrink it question worse. -- than like that

market, of guess cost doing all the level address my reconcile So of of higher. in been shrink, question around investment to concern is I that. which the to going real just I'm trying a required business But has

you're you've investments the making, a here in fully that is again. not done to step you going are what baked really up from confident how including perspective, is have to and So payroll

long we term. those yes, guidance And to confidence us than Yes. That's a been we shrink I gives in great want our just to seeing reiterate it have thought question. are green which was shoots, QX worse would reiterate, but

we're want around that. will momentum. across. would believe, I to all doing gain the tell that So that relates to to it would I sure got Basics, But make just continue, point show as we it Everything work to you Back we

that also the of of earlier, gain rising momentum levels impressive reduction store, Kelly I indicated those indicated but when many inventory inventory the in line. opportunities have look and pretty across shrink a in we aggressive light at sales. to And And as you directly mean, I affect

and on inventory all And leads so about too -- will to discretionary a think those in always additional much store because shrink. that XX.X% noncom business, you shrink X.X% or inventory that believe our help instances when some per or in actions over inventory reduction line we with that, business

to continue So that watch we carefully.

happens. and we as has confident the other really is Now are where expense are largest, that sure consumer resonates so I it a look the sees great the that important being as million on quickly we it work and rates gets Wage But and thing in as we're it you last commitment and investment awareness And shelf inventory levers way level when gets consumer in that to doing, shape to today. strong comes feel sure was lines, store as is, at our quality stores the as $XXX a then always wages in good mentioned, consumer all at been. as want grow And the other make year we the levels those and that the to grow to front our the with. in of possible. make in that far

that, see labor the right of hours have are when And you that stores. I we point past inside believe that look benefit our of starting this we're -- believe some now. amount of at we to But we

over early hourly average -- from a rate We years, XX% the as our in the seen we've over to XXXX many well. increase also, XXXX,

the track. And gives confidence right invested there. so what we've we're That's on that us

we investments where needed. We make see those to continue

we added investment managers. made was additional year other The district we this XXX

his again, less develop at span And very get point, teach, or to every they're train, more can is is and able ex-district manager being most have stores either that her because, an control, at their to and one manager problems a each I district often, responsibility. was anytime of important store that's to that solve able importantly,

reducing very 'XX spans those So move those to start hold. and those control as should That as dividends pay through of we important. is take

year. were we've track. made. investments and the our feel that right We all for We So they're everything can the are else good about with they feel good now, that rest the we we on feel we into of And about that guidance appropriate. right today we where feel see baked

is question next coming The from Ciccarelli Scot of Truist.

the mix? permanent relative that margin mix? shift a and you as balance to and of be the growth outpace well, you of just So SKUs versus more consumables pressure eventually certainly in out you becomes can guys discretionary case sales discretionary rates reduce that so consumables don't alleviate appears do significantly to as It how in of continue some the from stores the Or you?

permanent we're a the at thing it's And let say, right doing me right believe the believe don't We time. I step exactly again, and shift. Yes. back

need that right, we care with needs down to of go. You where And us right she because that, years and come this have those pressures to doubled take at couple Dollar always right of go over the where years, inflation finances, consumer the now, may last us with recall the we her. said, on her we be her. that, is over And wants to for now the General meaning of I've because

in in said, QX just believe and growth that you I And I our meaning consumer resonating all what comp our is benefit transaction for see would with QX that.

exiting all the initiatives pandemic did through well I we still pandemic, our her work nonconsumable our do has we in see to needs spend around the out and to we alive want stores. that and see even around is thing is And proven, the now, consumer discretionary in It's right the General. the Now when at spend. needs Dollar it, she again, what she it point

feed that. But that -- this go, discretionary her family the more foster continue to to meantime. the business the more to that her and the side believe to long? back even and of grow her and the So at consumer the for Again, she's go a we ready continue freely she half through that that this take of more on the either tell wants she where with permanent How same side. care of in able and year, ready into to wait meantime, as willing We'll year spending products move We to and start don't temporary. serve needs right time, will us believe when But her the standing value options to us in it's we'll see. we shift. is we'll have family,

next question Evercore coming from Michael of The ISI. is Montani

the and wanted a little supply just inventory into chain. dig to side further I bit

start in-stocks kind feel are this bit inventory you the back? at can inventory need vision should line a on just to on product Or with like the supply your So reductions front, then do this point? we looking? chain, you you little and what what's could we year? How there grow X And additional further you of Todd, coming in expect When optimal of flow again? DCs kind get have

really inventory start remains I'll inventory on And a us. high with that priority So for still the question. say, reducing I'll

well inventory. that is in as things, supply upstream does simplify So to on the chain, both focus per reducing as and we're What store stores. really going our that

And to so we a continue that at as priority. look high

around really inventory focusing piece of The that other on is optimization.

starting were to little a dividends. are some technology. Those bit about investments in quarter pay talked we we last that so And making

what how carrying our serve from customers we level. the And next in to the stores sure better so to that position an XX we're on over making we are to months in from inventory really are a rightsize looking in-stock and the just XX

We seeing improve. in-stocks are

the but in-stocks. they just And happy and are to do reducing both improving to have we So our now a had of that. quarters a couple fantastic of a I've inventory I done job shoutout know team

have this I'll good Todd you felt our quality of inventory. said earlier And along, and really tell all we the about

there. not the And cash huge issue. just just a little Todd we manageable getting about I'm levels felt got to just our into thing cash. just the reiterate, a those in don't to mind, the down store really did about the did that It's and But so we've out again, you that really that that's One for And if more see management so bit going DCs. inventory, called inventory in is great our nonconsumable that in So flow. on then, they're decline decreases. side segue numbers. what the XX.X%

So was operations our from up year. to XXX% last cash

carrying And also to but a being is lowering really from and only so just operations not standpoint this costs driver really impactful important cash. the our our

chain your I'll add second reiterated sorry, on, And the our -- then, right I part feel good reiterate, question, is of just again, Kelly, as I about said, where now. as supply I'm we I'll

As Rock, on and our in temporary come catalyst in a also of X in we we it even Rock, year will closer X fact, later already these Colorado out that out Matter bring of that DC, as we forward. more facilities give move confidence we and little and of we'll said, XXXX. this will those Arkansas Little Colorado these us we're Little remaining facilities in X, really, we opened, again, out had, of And be there Arkansas. the the as

in-stock saying Are I on grow meaning is consumer we they're level we Dollar definitely years in also shelf, finding all our believe at boy, inside are from we're were light of and seeing what the they the benefit they're that So more again, well that work consumer need the the us The No. often yet? continue that we we've to store. inside done, General. perfect where But way. telling

seem and chain. that we there from now and systems from So to that levels green on-time level all benefit continue right in-stock our supply

coming is Advisory Telsey Feldman of question today final Joe Our from Group.

the measurable engaged only X made Or it customer months, any they're if it I removing has any know the stores like it's the original said, better X,XXX like kind ones flow, created I if shoots you you May initial did, but XX,XXX the ask, you've seen for with wanted have to longer in wondering, associate? green lines? an is that stores of has just remodeled? self-checkout difference? happened changed it's I the just that I'm you because in maybe know

no positive been X,XXX And that customer board, Well, the -- for of is weeks frankly, where them May, getting a couple we're that. many feedback have them of we of across now. quite in have Yes. you on thank doubt stores some the couple X,XXX a for stores. of did There the

at getting, we're positive it So like of of from always the vast the front the because what getting majority from we're our that they feedback. It's consumers interaction the store.

was at And case comes also not XXXX. the all front with store, at having in that interaction visible as which, somebody recall, always you of then very times, the the

from should as continue come 'XX we with to results that move So that shrink action. through better

is Now to the those of the overall what interact from -- But is and you. the see. the move we'll and are that at the shoots into more believe we start front. watch overwhelmingly those the some all we'll We half that at times We someone to with even can reaction as with get. green we back checkout we of That consumer see 'XX. like year thank

the we to the consumer X,XXX really on the response, everything take the board that lane from we all the May did rely saw across stops all it that and to move in if work confidence, And we that year. good in again, for will, and X,XXX we consumer stores an you starts with assisted us store. earlier that other from So which actions gave stores in the that that take happen because

and today. for time have all today's thank to is we would General that gentlemen, for conference. like on interest your you the and participation Dollar your Ladies We in

at of time your off You enjoy your day. webcast and or may this log lines the disconnect the rest