Dollar General 2015 Annual Report Download - page 3

improve adult and youth literacy, and with the support
of our stores and our customers, we also raised funds
for St. Jude Children’s Hospital, Autism Speaks and the
American Red Cross.
I have a clear vision for the future of Dollar General
to strengthen our business and continue on a path of
sustainable, profitable growth. We will focus on four
key priorities:
1. Driving profitable sales growth. To drive profitable
sales growth, we will deliver on our brand promise
of everyday low prices and will continue to focus
on improving our on-shelf availability and customer
experience. To a greater degree than we have in
past years, our sales-driving category initiatives
will be implemented across not just new stores,
relocations and remodels, but also to our mature
store base. We have ongoing opportunities for
gross margin expansion through improvements in
inventory shrink reduction, global sourcing, private
brands penetration, distribution and transportation
eciencies and non-consumable sales.
2. Capturing growth opportunities. Given our strong
new store returns, our plan is to open 900 new stores
in 2016. We are accelerating our square footage
growth with a new store format for all new stores,
relocations and remodels. The updated format will
allow for an expansion in products we know our
customer wants and will provide a more customer-
friendly layout including a faster checkout.
3. Enhancing our position as a low-cost operator. We
have undertaken zero-based budgeting to provide
additional flexibility, reinvest savings and drive
growth. We are also focused on work elimination to
keep the business simple.
4. Investing in our people as a competitive advantage.
Our strategy is focused on talent selection and
employee development through great onboarding,
training and open communication. We are committed
to helping our employees develop their talents and
gain additional skills and experiences to grow their
careers at Dollar General. Their success is key to our
success as a company.
At Dollar General, we have a business model that is
proven and resilient. As a team, I am confident we are
well-positioned to drive long-term shareholder value as
we look to capture growth opportunities and invest in the
future. I thank you for your continued support.
Respectfully,
This has been a strong year at Dollar General. Despite
many changes within the retail landscape throughout
2015, our business continued to drive profitable sales
growth, meet the needs of our customers and create
long-term shareholder value. I am excited and honored
to have been named chief executive ocer of Dollar
General in June of last year. Our company has a unique
culture of Serving Others, a rich history and a very
bright future. Our values and our mission of service are
at the core of our success. Our business strategies, how
we utilize technology and how we serve our customers
will continue to evolve as we leverage our competitive
advantages. Within the small-box discount retail sector,
we have an opportunity to strengthen our leadership
position and grow our market share.
2015 was another record year for Dollar General as
our associates served millions of customers resulting
in over 1.8 billion transactions. We made targeted
investments in store labor to improve our in-stock
position and implemented merchandising initiatives to
improve category management and enhance the overall
shopping experience.
Highlights of 2015 Compared to 2014
• Net sales increased by 7.7 percent to $20.4 billion or
$226 per square foot.
• Same-stores sales grew 2.8 percent over 2014,
marking our 26th consecutive year of same-store
sales growth.
• We reported net income of $1.17 billion or $3.95 per
diluted share, an increase of 13 percent.
• Cash flow from operations was $1.4 billion, an
increase of $63 million.
The refinement of our merchandise oerings and
increased utilization of store square footage helped drive
increases in both customer trac and average transaction
amount for the 32nd consecutive quarter over prior year
quarter. We invested in new store growth, opening 730
new stores in addition to completing our 13th distribution
center in San Antonio, Texas. Our ongoing commitment
to increasing long-term shareholder value is evidenced
by the $1.6 billion return of cash to our shareholders in
2015 through the repurchase of nearly 18 million shares of
our common stock and the initiation of a regular quarterly
cash dividend.
As CEO, I have had the opportunity to travel throughout
the United States visiting both our consumers and
our store employees. It is clear to me that our culture
of Serving Others is very meaningful to the local
communities and the individuals we employ and serve.
In 2015, we partnered with the Dollar General Literacy
Foundation, the Dollar General Employee Assistance
Foundation, our customers and our vendors to donate
over $17.3 million to charitable organizations and
individuals in need. Nearly 80 percent of that giving was
directed to nonprofit organizations and schools to help
Todd J. Vasos
CHIEF EXECUTIVE OFFICER
April 8, 2016
TO OUR FELLOW SHAREHOLDERS, CUSTOMERS & EMPLOYEES