On August 25th, Dollar General (DG) and Dollar Tree (DLTR) reported on their second quarters of FY 2022 ending July 29th and 30th respectively. 

For the second quarter Dollar General earned $678 million on sales of $9,426 million with a diluted EPS of $2.98.  Revenue was 9.0 percent higher compared to the second quarter of fiscal 2021, and net income was 6.4 percent higher with EPS up 10.8 percent. The Company posted assets of $28,239 million, of which $5,538 comprised intangibles against long-term debt and lease obligations of $13,376 million.

Dollar Tree earned $359.9 million on revenue of $6,765 million with a diluted EPS of $1.60.  Compared with the second quarter of fiscal 2021, revenue was up 6.7 percent, net income by 27.4 percent and diluted EPS 30.1 percent higher. The Company posted assets of $22,676 million, of which $5,084 comprised intangibles against long-term debt and lease obligations of $8,559 million.

In comparing financial performance of the Dollar stores, growth in same-store sales increased by 4.6 percent for Dollar General compared to an increase of 7.5 percent for Dollar Tree with a 2.0 percent increase for subsidiary Family Dollar.  Dollar General market capitalization on September 2nd was $54,720 million compared to $30,389 million for Dollar Tree. Dollar General traded during the past fifty-two-weeks over a range of $188.25 to $262.21.  Forward PE is 21.1.  Dollar Tree has traded over fifty-two-weeks in a range of $84.26 to $177.19. Forward PE is 19.1.

The twelve-month trailing values reflecting management effectiveness were return on assets of 7.3 percent for Dollar General and 6.3 percent for Dollar Tree.  The respective returns on equity were 37.6 percent for Dollar General compared to 20.3 percent for Dollar Tree.  Dollar General achieved an operating margin of 8.8 percent compared to Dollar Tree at 8.0 percent.  The respective profit margins were 6.6 percent for Dollar General and 5.8 percent for Dollar Tree.

Dollar General opened 227 new stores and remodeled 533 during the most recent quarter. The Company plans to open 1,100 new stores in 2022 with 800 conforming to a larger 8,000 square foot format. By the end of the current year Dollar General will operate 18,000 stores with 11,000 equipped for self- check out payment. Dollar tree operates 16,231 stores in 48 U.S. states and in five Canadian provinces. Dollar General has introduced fresh produce in 700 stores and will expand this offering in response to customer requests and pressure from local authorities concerned over the quality of nutrition of residents in inner-city neighborhoods. 

The category breakdown of sales for Dollar General (and presumably Dollar Tree) comprises consumables, (79%); Seasonal, (12%); Home products, (6%) and Apparel (3%).