Dollar General 2010 Annual Report Download - page 109
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10-K
evaluate a store for relocation opportunities approximately 18 months prior to the store’s lease
expiration using the same basic tools and criteria as those used for new stores. Remodels, which require
a much smaller investment, are determined based on the need, the opportunity for sales improvement
at the location and an expectation of a desirable return on investment.
Key Financial Metrics. We have identified the following as our most critical financial metrics for
2011:
• Same-store sales growth;
• Sales per square foot;
• Gross profit, as a percentage of sales;
• Operating profit;
• Inventory turnover;
• Cash flow;
• Net income;
• Earnings per share;
• Earnings before interest, income taxes, depreciation and amortization; and
• Return on invested capital.
Readers should refer to the detailed discussion of our operating results below for additional
comments on financial performance in the current year periods as compared with the prior year
periods.
Results of Operations
Accounting Periods. The following text contains references to years 2010, 2009 and 2008, which
represent fiscal years ended January 28, 2011, January 29, 2010 and January 30, 2009, respectively. Our
fiscal year ends on the Friday closest to January 31. Fiscal years 2010, 2009 and 2008 were 52-week
accounting periods.
Seasonality. The nature of our business is seasonal to a certain extent. Primarily because of sales
of holiday-related merchandise, sales in our fourth quarter (November, December and January) have
historically been higher than sales achieved in each of the first three quarters of the fiscal year.
Expenses and, to a greater extent, operating profit vary by quarter. Results of a period shorter than a
full year may not be indicative of results expected for the entire year. Furthermore, the seasonal nature
of our business may affect comparisons between periods.
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