Dollar General sells food, household supplies and other everyday goods through neighborhood stores. In its second quarter ended July 31, 2026, operating profit rose 29.2%; removing management’s estimated benefit from tariff refunds after related spending leaves a calculated increase of about 16.7%. More shopping trips and better store economics give its renovation program a stronger base, although weaker first-half cash generation leaves less spare cash for planned share buybacks.
Analysis period: second quarter and first half of fiscal 2026. Research cutoff: October 17, 2026, New York time. The latest financial outlook verified here is dated August 27; subsequent product announcements reviewed extend through September 24.
Sources: Dollar General’s second-quarter 2026 Form 10-Q, consolidated income statements and Management’s Discussion and Analysis, pp. 7 and 20–25; August 27, 2026 earnings release, “Second Quarter Fiscal Year 2026 Overview.” The refund calculation is shown in section 2.
1. More shopping trips are lifting sales, while customers still limit their baskets
Sales growth is coming from more transactions as well as higher spending per transaction. Sales at stores open long enough to be compared with the previous year rose 3.5% in the quarter. Customer traffic increased 2.0%, and the average purchase amount increased 1.5%.
The second part needs care. Dollar General says higher retail prices lifted the average purchase amount, while customers bought fewer items per transaction. The company is attracting more shopping visits, but the basket data still show pressure on household budgets. First-half comparable sales rose 2.7%, with traffic up 1.7% and average purchase amounts up 1.0%.
New stores also contributed. Total quarterly sales increased 5.2% to $11.29 billion, faster than sales at comparable stores. The chain ended July with 21,148 stores across 48 U.S. states and Mexico. It reports one operating segment; the product categories below are sales categories, not separately reported profit centers.
| Product sales, US$ millions | Second quarter FY2025 | Second quarter FY2026 | Calculated growth |
|---|---|---|---|
| Consumables, including food and household necessities | 8,819.9 | 9,263.0 | 5.0% |
| Seasonal merchandise | 1,106.1 | 1,187.7 | 7.4% |
| Home products | 511.8 | 536.6 | 4.8% |
| Apparel | 289.9 | 303.1 | 4.5% |
| Total | 10,727.7 | 11,290.4 | 5.2% |
Sources: 2026 second-quarter Form 10-Q, Note 8, pp. 16–17, and “Net Sales,” pp. 24–25. The quarters contain 13 weeks ended August 1, 2025 and July 31, 2026. Growth uses unrounded filing amounts.
Every category grew, and seasonal merchandise grew fastest. Nevertheless, necessities supplied about 79% of the dollar increase in sales. The other three categories together represented approximately 18.0% of sales, only slightly above 17.8% a year earlier. These products generally carry higher gross margins, according to management, but the small change in their sales share limits how much of the profit improvement can be explained by a different product mix.
The recovery also has some history behind it. In the second quarter of fiscal 2024, comparable sales rose only 0.5%, and seasonal, home and apparel comparable sales all declined. Comparable sales growth improved to 2.8% in the second quarter of 2025 before reaching 3.5% this year. That progression supports a broader recovery in store demand, even though customers remain careful about how many items they buy.
Sources: 2026 second-quarter Form 10-Q, executive overview and key performance indicators, pp. 20–22; August 29, 2024 earnings release, “Second Quarter 2024 Highlights.”
2. Refunds magnified a profit recovery already under way
Profit still improved substantially after removing the estimated net tariff-refund benefit. Reported results come first: Dollar General earned $769.2 million before interest and income taxes in the quarter, compared with $595.4 million a year earlier. It kept $6.81 of operating profit from each $100 of sales, up from $5.55.
| Consolidated results, US$ millions unless indicated | Second quarter FY2025 | Second quarter FY2026 | First half FY2025 | First half FY2026 |
|---|---|---|---|---|
| Net sales | 10,727.7 | 11,290.4 | 21,163.7 | 22,077.3 |
| Operating profit | 595.4 | 769.2 | 1,171.5 | 1,407.7 |
| Operating margin | 5.55% | 6.81% | 5.54% | 6.38% |
| Net income, after interest and taxes | 411.4 | 550.3 | 803.4 | 994.4 |
| Net margin | 3.84% | 4.87% | 3.80% | 4.50% |
| Diluted earnings per share, US$ | 1.86 | 2.48 | 3.64 | 4.49 |
Source: 2026 second-quarter Form 10-Q, consolidated income statements, p. 7. First-half columns cover 26 weeks; quarterly columns cover 13 weeks. Margins are calculated from unrounded amounts.
During the quarter, Dollar General began receiving refunds of tariffs previously paid under the International Emergency Economic Powers Act. It received most of the expected refunds and used a substantial portion for promotions and lower everyday prices. Keeping prices appealing can help retain customer visits, so the refunds financed a commercial response as well as lifting profit.
Management estimates that the benefit remaining after related reinvestments added 0.66 percentage points to operating margin and about $0.25 to diluted earnings per share. The following calculation removes those net benefits, rather than subtracting an undisclosed gross refund amount.
| Second-quarter measure | Reported FY2026 | Estimated net refund benefit deducted | Calculated FY2026 excluding that benefit | Reported FY2025 comparator | Calculated growth excluding that benefit |
|---|---|---|---|---|---|
| Operating profit, US$ millions | 769.164 | −74.517 | 694.647 | 595.428 | 16.7% |
| Diluted earnings per share, US$ | 2.48 | −0.25 | 2.23 | 1.86 | 19.9% |
Sources: August 27, 2026 earnings release, operating-margin and EPS estimates; 2026 second-quarter Form 10-Q, pp. 7 and 20.
Calculation notes: These are calculated, non-GAAP comparisons, not company-reported adjusted earnings. The operating-profit deduction is quarterly sales of $11,290.380 million multiplied by 0.0066. It is a pretax operating amount. The EPS deduction uses management’s separate, rounded after-tax estimate; no tax rate is imposed on it. The prior-year reported amounts are left unchanged. The company’s larger 0.81-percentage-point gross-margin benefit applies before operating expenses and is not used to calculate operating profit. These calculations leave other accounting and business effects in the results.
One remaining source of help was a smaller inventory-cost charge. Dollar General uses last-in, first-out accounting, or LIFO, which generally assigns more recent purchase costs to the goods sold. Its quarterly LIFO provision fell from $62.3 million to $16.8 million. That $45.5 million reduction helped pretax profit and remains in the comparison above. Interim LIFO charges rely on estimates of year-end inventory and costs, so the final annual calculation can change them.
The share of sales left after merchandise and distribution costs, called gross margin, rose from 31.34% to 32.60%. Alongside refunds and the lower LIFO charge, management identified lower distribution costs as a benefit. More markdowns and higher transportation costs worked in the opposite direction. Store and administrative expenses stayed close to 25.8% of sales. Charges for the use of stores and equipment over time, called depreciation, took a larger share of sales. Rent took a smaller share, offsetting that pressure in management’s explanation. The quarter’s operating-margin gain therefore came mainly from keeping more of each sales dollar after merchandise and distribution costs.
Missing inventory, called shrink, shows a more mixed pattern. First-half shrink expense fell to $302.4 million from $322.7 million. In the second quarter alone, it increased slightly to $149.3 million from $146.6 million, although it fell as a share of sales to about 1.32% from 1.37%. The longer-period improvement is real; the latest quarter does not show another decline in the dollar loss.
Sources: 2026 second-quarter Form 10-Q, Note 1, p. 11; Note 8, p. 17; results of operations, pp. 24–25; August 27 earnings release, SG&A discussion.
Financing helped net earnings too. First-half net interest expense fell to $90.1 million from $122.3 million, primarily because average borrowings were lower. Taxes partly offset that benefit: the effective tax rate rose to 24.5% from 23.4%. The company chiefly attributes the increase to the expiration of federal hiring credits, including the Work Opportunity Tax Credit for employees hired after December 31, 2025. The company says the expiration will continue to raise its tax rate unless the program is restored.
Share-count changes slightly restrained earnings per share. First-half diluted average shares increased to 221.532 million from 220.495 million. Net income grew 23.8%, while reported diluted EPS grew 23.4%. No open-market share repurchases occurred during either first half. The earnings improvement came from the business and financing costs, with modest dilution working against the per-share result.
Source: 2026 second-quarter Form 10-Q, consolidated income statements, p. 7; Notes 2, 3 and 9, pp. 11–13 and 18; interest and tax discussion, p. 25.
3. More cash was tied up in inventory and amounts owed by suppliers
First-half operating cash fell 17.5%, despite higher profit, but still covered investment and dividends. The business generated $1.497 billion of operating cash, down from $1.815 billion. The main explanation is the timing of inventory purchases, supplier-related receipts and tax payments.
Building inventory used $249.0 million of cash in the first half of 2026. A year earlier, reducing inventory had released $44.7 million. That change alone explains $293.6 million of the year-over-year cash-flow deterioration, before offsets elsewhere.
Prepaid expenses and other current assets used another $169.4 million, compared with $25.7 million a year earlier. Management primarily links this increase to vendor receivables: more amounts owed by suppliers had yet to arrive as cash. Changes in tax balances also absorbed cash this year instead of releasing it, reflecting the timing of tax accruals and payments.
The timing of payments to merchandise suppliers partly cushioned these effects. The cash-flow statement shows a $275.5 million contribution from accounts payable, versus $111.2 million a year earlier. The company had received goods for which payment remained due. Management attributes the difference mainly to inventory receipts and payment timing, rather than a disclosed change in payment terms.
Source: 2026 second-quarter Form 10-Q, consolidated cash-flow statements, p. 10, and “Changes in Cash Flows,” pp. 26–27. A complete profit-to-cash reconciliation appears in the calculation notes below.
Annual comparisons still show improved inventory efficiency. Inventory rose 3.5% from the fiscal year-end balance, but remained 0.9% below the same date a year earlier. Inventory per store was down 2.7% year over year. The company’s trailing-four-quarter inventory turnover rose to 4.6 times from 4.3 times. This measure compares the cost of merchandise sold with the average inventory held. These comparisons support improved stock efficiency despite a less favorable first-half cash movement.
Sources: 2026 second-quarter Form 10-Q, balance sheets, p. 6; inventory-turnover definition, p. 23; cash-flow discussion, p. 27; August 27 earnings release, comparative balance sheets showing August 1, 2025 inventory of $6,609.690 million.
| Cash generation and allocation, US$ millions | First half FY2025 | First half FY2026 |
|---|---|---|
| Operating cash generated | 1,814.855 | 1,496.705 |
| Cash purchases of property and equipment | 693.918 | 758.450 |
| Free cash flow after those purchases, calculated | 1,120.937 | 738.255 |
| Cash dividends paid | 259.718 | 260.307 |
| Cash remaining after capital spending and dividends, calculated | 861.219 | 477.948 |
Source: 2026 second-quarter Form 10-Q, consolidated cash-flow statements, p. 10.
Calculation notes: Free cash flow here means operating cash minus gross cash purchases of property and equipment. It does not net out asset-sale proceeds or count newly signed leases as cash capital spending. Operating cash already includes operating-lease payments. All rows cover the same 26-week periods; spending and dividends are shown as positive uses of cash.
Cash on hand nevertheless increased by $451.1 million to $1.590 billion. A major reason cash accumulated despite lower operating cash flow was that debt repayments fell to $11.9 million from $509.6 million in the previous first half. The company preserved cash by having fewer loans to repay, while the operating business left a smaller surplus after investment and dividends.
Source: 2026 second-quarter Form 10-Q, consolidated cash-flow statements, p. 10.
4. Store upgrades are taking more of the investment budget
Management is putting more capital into existing stores while slowing new openings. Full remodels under Project Renovate and partial remodels under Project Elevate aim to improve product displays, refresh stores and make shopping easier. Management also expects these changes may reduce future repairs and maintenance.
That purpose fits the current business problem. More visits create an opportunity to sell additional items, but shoppers remain budget constrained. Better layouts and a useful assortment can help stores capture those visits; opening more locations alone would not address weaknesses inside existing stores.
| Cash capital spending, US$ millions | First half FY2025 | First half FY2026 |
|---|---|---|
| Existing-store improvements, upgrades, remodels and relocations | 365.4 | 414.5 |
| Distribution and transportation projects | 151.1 | 168.2 |
| New-store improvements, fixtures and equipment | 142.8 | 132.7 |
| Technology and other projects | 34.6 | 43.1 |
| Total, rounded | 693.9 | 758.5 |
Source: 2026 second-quarter Form 10-Q, “Cash flows from investing activities,” p. 27. Technology and other projects combine the two separately disclosed categories; components are approximate.
Existing stores absorbed more than half of the capital budget. First-half new openings fell to 321 from 360. Meanwhile, the company completed 1,324 Renovate remodels, 1,422 Elevate remodels and 11 relocations. Rising construction and occupancy costs have reduced projected returns on new stores and influenced expansion plans, according to management. Spending more on the installed store base is therefore consistent with both improving service and adapting to higher expansion costs.
Management says its full-year distribution plan includes work on existing facilities and replacement of transportation assets. Technology investment supports operational systems. The capital program therefore includes replacement and upkeep as well as expansion, although the filing does not allocate every dollar between those purposes.
Source: 2026 second-quarter Form 10-Q, executive overview, pp. 21–22, and capital-spending discussion, pp. 27–28.
Convenience also increasingly includes delivery. Dollar General says its own and third-party delivery services are available in most stores and contribute meaningfully to comparable sales. Its advertising platform, DG Media Network, lets brands reach its customers. Neither activity has a separately disclosed profit contribution in this filing, so the evidence supports a broader sales channel rather than a quantified new earnings engine.
Competition makes execution important. Walmart reported 24% growth in U.S. e-commerce sales for its quarter ended July 31, 2026, and described using tariff refunds for price investments. Dollar General’s nearby stores remain useful for quick purchases, but a competitor combining delivery and lower prices can contest the same convenience.
Sources: 2026 second-quarter Form 10-Q, p. 21; Dollar General fiscal 2025 Form 10-K, Item 1, “Competition”; Walmart’s August 20, 2026 earnings release, “Walmart U.S.” and guidance. Walmart calls this fiscal 2027’s second quarter; the calendar end date matches Dollar General’s quarter.
After the filing, Dollar General announced a holiday Hallmark collection for approximately 19,500 stores, with more than 70% of items priced at $5 or less. Its September toy announcement added a dedicated shelf for toys priced at $5 or less and an assortment of more than 170 seasonal toys. These are concrete efforts to win affordable gift and seasonal purchases alongside everyday necessities. Their contribution will depend on sales through the holiday season and the discounts needed to clear remaining goods; the announcements do not report realized sales or profit.
Sources: September 16, 2026 Hallmark collection announcement; September 24, 2026 holiday toy announcement.
5. Earlier debt repayments create room, but rent and buybacks compete for cash
Dollar General has substantial funding capacity, with its next large bond maturities in 2028. Current and long-term financing obligations totaled $4.571 billion at July 31, little changed from $4.580 billion at January 30. The larger improvement occurred during fiscal 2025, when it redeemed $1.650 billion of bonds, including both series previously due in 2027. That history helps explain this year’s lower interest expense.
The next senior-note repayments are $500 million in May 2028 and $500 million in July 2028. Later maturities extend to 2052. Most bond coupons are fixed, although interest-rate swaps convert $350 million of the 2030 bonds to a floating rate. The maturity and interest details appear in the technical notes.
There were no external commercial-paper or revolving-credit borrowings on the consolidated balance sheet at quarter-end. The $2.375 billion revolving facility runs to September 2029. Management identifies $2.180 billion as incremental liquidity after allowing for commercial-paper backing. The $195 million of commercial paper held by a wholly owned subsidiary is eliminated on consolidation; it is not an additional outside borrowing.
Sources: 2026 second-quarter Form 10-Q, Note 5, pp. 14–15, and Item 3, p. 28; fiscal 2025 Form 10-K, Note 5, pp. 60–62, and Item 7A, p. 41.
Access to that credit depends on meeting contractual limits. The agreement restricts debt relative to lender-defined earnings and requires those earnings to cover rent and interest. Its normal maximum leverage ratio is 3.75 times, and minimum fixed-charge coverage is 2.00 times. Temporary relief ended no later than January 30, 2026. The company reported compliance at July 31, but did not disclose the actual ratios needed to calculate its remaining covenant room.
Sources: March 11, 2025 credit-agreement amendment, Section 1(a), (e) and (f); 2026 second-quarter Form 10-Q, Note 5. Covenant measures use the agreement’s definitions, not an ordinary balance-sheet debt-to-profit calculation.
Rent is a larger ongoing commitment than the bond balance alone suggests. Operating-lease liabilities totaled $11.202 billion, and cash paid against those leases was $1.03 billion in the first half, up from $0.99 billion. The average remaining lease term was nine years. Leasing supports the store network without requiring Dollar General to buy each property, but it leaves payments that continue when an individual store’s sales weaken.
New operating leases added $845.9 million of rights to use property and corresponding obligations during the first half without an immediate equivalent cash outflow. That is why the cash capital-spending figure does not capture every new commitment. These leases are shown separately from financing debt, and lease payments have already reduced operating cash flow.
Source: 2026 second-quarter Form 10-Q, balance sheets, p. 6; cash-flow supplemental disclosures, p. 10; Note 4, p. 13.
The asset base expanded mainly through cash, inventory, property and store-use rights. Net property and equipment rose $225.3 million to $6.624 billion as investment continued. Goodwill stayed at $4.339 billion, and other intangible assets remained approximately $1.200 billion, consisting substantially of trade names and trademarks. Those balances are accounting values associated with the business, not cash available to finance renovations.
Equity, the accounting difference between assets and liabilities, rose $776.7 million to $9.289 billion, principally because the company retained much of its profit after dividends. Stock compensation also increased contributed capital. Its $61.2 million expense is added back in the cash-flow statement because it is noncash, but awards paid in shares can still dilute existing shares. Net shares outstanding rose by approximately 395,000 during the first half. The equity reconciliation below distinguishes this movement from repurchases.
Sources: 2026 second-quarter Form 10-Q, pp. 6 and 9–10; fiscal 2025 Form 10-K, Note 1, “Goodwill and other intangible assets,” pp. 51–52.
Management had suspended program buybacks after 2022 to protect financial flexibility and its investment-grade credit rating. It now plans to resume them, with up to $700 million included in its fiscal 2026 outlook. Repurchases would use cash and could reduce the share count, depending on purchase prices and offsetting share issuance. They would not directly increase store operating profit.
The scale matters. The full $700 million would exceed the $477.9 million left after first-half capital spending and dividends. That is a comparison of size, not a prediction of a second-half funding shortfall. Dollar General also has $1.590 billion of cash and expects further operating inflows. However, its annual capital plan still implies approximately $642 million–$742 million of spending after July, before dividends and repurchases. Returning cash more quickly will leave less room to absorb another inventory buildup or weaker trading without drawing on available credit.
Sources: 2026 second-quarter Form 10-Q, capital spending and share-repurchase discussion, pp. 27–28; August 27 earnings release, fiscal 2026 guidance. Remaining spending is calculated from the $1.4 billion–$1.5 billion annual plan less $758.450 million already paid.
6. The second half must rely more on stores and less on refunds
Management’s improved outlook assumes no material net refund benefit in the second half. Its August forecast calls for full-year sales growth of 4.0%–4.3%, comparable sales growth of 2.5%–2.9%, and diluted EPS of $7.80–$8.00. The EPS forecast includes the estimated $0.25 second-quarter refund benefit. These are management expectations, not results already earned.
That puts the next stage of improvement back on customer visits, useful merchandise and operating execution. Lower distribution costs and the first-half reduction in missing inventory offer evidence that the company can improve profit internally. The main counterweights are higher fuel and transportation costs, customers buying fewer items per visit, and continued spending on stores and equipment. Management said fuel costs rose significantly in the quarter and expected that pressure to continue for an uncertain period.
Sources: August 27 earnings release, fiscal 2026 guidance; 2026 second-quarter Form 10-Q, executive overview, pp. 20–22. No later financial forecast is asserted in this analysis.
Tariffs remain relevant even after the refunds. Dollar General directly imported about 4% of its fiscal 2025 purchases at cost, but domestic suppliers also import goods and components. The direct-import share therefore understates its exposure to import costs. Management said tariff rates did not materially affect second-quarter 2026 results, while warning that future cost increases could force price changes that customers resist. The useful business test is whether the chain can keep products affordable while preserving the margin improvement shown this quarter.
Sources: Fiscal 2025 Form 10-K, Item 1A, merchandise sourcing risk; 2026 second-quarter Form 10-Q, p. 20.
Legal proceedings create a separate potential claim on cash. The shareholder securities lawsuit concerning alleged statements about labor, inventory, pricing and related practices remained active. Plaintiffs filed a third amended complaint in March 2026, and briefing on the company’s dismissal motion finished in May. The company could not estimate a loss or range of loss and said an unsuccessful defense could materially affect its consolidated financial statements. Related derivative cases remained stayed.
Management nevertheless believed its pending legal matters, collectively and individually, would be resolved without a material adverse effect. Both disclosures matter: the company’s expectation is favorable, but an unquantified adverse outcome remains possible. Separately, uncertain tax positions, associated interest and penalties had recorded reserves totaling $14.0 million; these reserves do not measure the securities-litigation exposure.
Source: 2026 second-quarter Form 10-Q, Note 3, pp. 12–13, and Note 7, pp. 15–17. Litigation status is as disclosed in the August 27 filing; no later court disposition has been verified here.
7. The recovery gives Dollar General more choices, with a smaller cash surplus to allocate
Dollar General’s recovery is supported by more shopping trips and higher profit beyond the refund benefit. Its existing-store investment program addresses the places where those customers already shop, and earlier bond repayments have reduced near-term refinancing pressure. Together, those improvements give management room to keep upgrading stores and resume returning more cash.
The next proof is whether those upgraded stores can keep increasing sales and profit as the refund contribution fades. A more stable cash surplus would strengthen the case for carrying out the investment and buyback plans together. Continued inventory and supplier-receivable cash demands, heavier discounts or persistent transportation inflation would narrow that room. The company has a stronger operating base than its headline refund gain alone suggests, but the pace of cash returns should remain tied to the cash the stores actually produce.
Reporting basis and calculation notes
Reporting basis: Dollar General Corporation, ticker DG, CIK 0000029534; consolidated U.S. GAAP Form 10-Q, accession 0001104659-26-101932, filed August 27, 2026. The second quarter covers May 2–July 31, 2026, compared with May 3–August 1, 2025. The first half covers January 31–July 31, 2026, compared with February 1–August 1, 2025. These are 13-week and 26-week periods respectively. Fiscal 2026 ends January 29, 2027. The interim accounts are unaudited and were reviewed by Ernst & Young; January 30, 2026 balance-sheet comparators derive from audited annual accounts.
Sources: SEC filing record; selected Form 10-Q, cover, Note 1 and independent accountant’s review; SEC company financial facts. Cross-checks used this accession’s consolidated U.S. GAAP facts, actual start/end dates and USD units. Quarter and cumulative facts were kept separate; calendar-frame labels were not substituted for fiscal dates.
Calculation notes: Filing amounts stated in thousands of dollars have been converted to millions unless otherwise labeled. Growth equals current-period amount divided by the comparable prior-period amount, minus one. A margin equals the relevant profit divided by sales. A percentage-point change is the difference between two percentages. Rounded table rows may not sum exactly; reconciliations below use unrounded source amounts.
A. How profit becomes operating cash
The company adds back expenses that did not require current cash payments, then adjusts for when inventory, suppliers, employees and tax authorities were paid. Positive amounts below increase operating cash; negative amounts reduce it.
| Reconciliation, US$ millions | First half FY2025 | First half FY2026 |
|---|---|---|
| Net income | 803.354 | 994.442 |
| Asset costs spread over time: depreciation and amortization | 509.609 | 548.310 |
| Deferred income taxes | 24.035 | 82.037 |
| Noncash stock compensation | 52.977 | 61.213 |
| Other noncash gains and losses, net adjustment | 88.387 | 29.922 |
| Inventory change | 44.667 | −248.951 |
| Prepaid expenses and other current assets | −25.727 | −169.447 |
| Accounts payable change | 111.177 | 275.501 |
| Accrued expenses and other liabilities | 167.312 | 74.696 |
| Income-tax balance changes | 46.560 | −140.944 |
| Other operating changes | −7.496 | −10.074 |
| Operating cash flow | 1,814.855 | 1,496.705 |
The year-over-year check is: prior operating cash of $1,814.855 million, plus $191.088 million of additional profit, plus $46.474 million of additional noncash adjustments, less $555.712 million from the combined change in operating balances, equals $1,496.705 million.
The tax law enacted July 4, 2025 allowed faster deductions for qualifying assets and significantly reduced the company’s fiscal 2025 cash taxes without materially changing its effective tax rate. The deferred-tax adjustment and tax-balance changes above are separate parts of the cash reconciliation; they are not added again as a further tax-saving benefit.
The 2026 cash balance checks as follows, all in US$ millions: opening cash of 1,138.501 + operating inflow of 1,496.705 − investing outflow of 754.282 − financing outflow of 291.334 = closing cash of 1,589.590. Investing outflow equals property purchases of 758.450 less asset-sale proceeds of 4.168. Financing outflow comprises debt repayments of 11.937, dividends of 260.307 and other equity-related payments of 19.090. The statement reports cash and cash equivalents; it does not present a separate restricted-cash reconciliation.
Source: 2026 second-quarter Form 10-Q, cash-flow statements, p. 10; Note 3, p. 13; cash-flow discussion, pp. 26–27.
B. What changed in the balance sheet and equity
| Consolidated balance-sheet amount, US$ millions | January 30, 2026 | July 31, 2026 |
|---|---|---|
| Cash and cash equivalents | 1,138.501 | 1,589.590 |
| Merchandise inventory | 6,331.861 | 6,552.841 |
| Income taxes receivable | 17.158 | 75.422 |
| Prepaid expenses and other current assets | 410.283 | 564.058 |
| Net property and equipment | 6,398.589 | 6,623.844 |
| Operating-lease assets | 11,072.500 | 11,150.429 |
| Goodwill | 4,338.589 | 4,338.589 |
| Other intangible assets | 1,200.050 | 1,200.082 |
| Total assets | 30,963.730 | 32,167.333 |
| Accounts payable | 4,051.592 | 4,349.548 |
| Accrued expenses and other current liabilities | 1,263.296 | 1,314.165 |
| Income taxes payable | 99.357 | 16.677 |
| Current and long-term financing obligations | 4,580.282 | 4,570.815 |
| Current and long-term operating-lease liabilities | 11,138.374 | 11,202.285 |
| Deferred income-tax liabilities | 1,038.863 | 1,120.887 |
| Total liabilities | 22,451.768 | 22,878.685 |
| Total shareholders’ equity | 8,511.962 | 9,288.648 |
This table selects material accounts, so its detail rows are not intended to sum to the totals. The complete balance sheets reconcile: July assets of $32,167.333 million equal liabilities of $22,878.685 million plus equity of $9,288.648 million. January assets of $30,963.730 million equal liabilities of $22,451.768 million plus equity of $8,511.962 million.
Supplier-finance obligations confirmed with financial institutions rose from $385.2 million to $406.3 million. Suppliers choose whether to sell these payment claims to banks. The annual filing says that choice does not change Dollar General’s amounts due or payment dates; the obligations sit within supplier payables and accruals. They should not be added again to liabilities. The increase is not evidence that Dollar General extended its payment terms.
The first-half equity increase comes mainly from profit kept in the business. The table preserves the equity statement’s dividend amount, which differs slightly from cash dividends paid.
| Equity reconciliation | First half FY2026, US$ millions |
|---|---|
| Opening equity | 8,511.962 |
| Net income | +994.442 |
| Dividends recorded in equity | −260.367 |
| Stock compensation | +61.213 |
| Other equity transactions | −19.030 |
| Hedging and currency gains outside net income | +0.428 |
| Closing equity | 9,288.648 |
Within that total, retained earnings—the accumulated profits kept after dividends—increased by $734.075 million. Additional paid-in capital increased by $41.837 million, comprising $61.213 million of stock compensation less $19.376 million of other equity transactions. Common-stock capital increased by $0.346 million, and accumulated gains outside net income increased by $0.428 million from hedging and currency translation. The balance sheet has no separate treasury-stock line; the filing reports no open-market repurchases in the period. The approximately 395,000 increase in outstanding shares is a net movement, not a gross issuance count.
Cash dividends of $260.307 million differ by $0.060 million from the $260.367 million equity entry. Other equity cash payments exceed the corresponding equity-statement movement by the same $0.060 million. Each statement’s own amounts are used in its reconciliation rather than treating the two dividend figures as interchangeable.
Sources: 2026 second-quarter Form 10-Q, pp. 6 and 8–11; Note 9, p. 18; fiscal 2025 Form 10-K, Note 1, “Supply chain finance programs.”
C. When lenders and landlords must be paid
The following table shows the bond principal to be repaid and the coupon, or annual interest rate. Discounts, issue costs and hedge adjustments affect the carrying values. The $4.571 billion financing-obligation balance also includes $140.506 million of other obligations before deducting debt-issue costs; those other obligations are outside this senior-note table.
| Senior-note maturity | Principal, US$ millions | Annual coupon |
|---|---|---|
| May 1, 2028 | 500 | 4.125% |
| July 5, 2028 | 500 | 5.200% |
| April 3, 2030 | 1,000 | 3.500% |
| November 1, 2032 | 700 | 5.000% |
| July 5, 2033 | 1,000 | 5.450% |
| April 3, 2050 | 500 | 4.125% |
| November 1, 2052 | 300 | 5.500% |
| Total principal | 4,500 | — |
Annual coupons on this principal total a calculated $208.250 million before the effect of swaps and other financing costs. The swaps replace the fixed interest on $350 million of 2030 notes with compounded SOFR, a floating benchmark. The January 30 contractual-obligations schedule estimated $221.261 million of interest due within one year, including variable-rate assumptions and other debt. That dated payment estimate is different from reported net interest expense, which also reflects interest income.
The revolving facility’s disclosed July borrowing rate was adjusted term SOFR plus 1.015 percentage points; adjusted term SOFR itself includes a 0.10-point spread adjustment. Its annual facility fee was 0.11% of commitments, or approximately $2.613 million on $2.375 billion before other fees. Rates and fees can change with credit ratings. The July filing identifies $12.670 million of financing obligations due within one year, separate from the larger 2028 bond maturities.
The latest full operating-lease payment schedule reviewed is dated January 30, 2026. It shows the rent commitments in place at that date, before the first-half payments and new leases discussed in section 5.
| Operating-lease schedule as of January 30, 2026 | US$ millions |
|---|---|
| Fiscal 2026 payments | 2,006.108 |
| Fiscal 2027 payments | 1,897.407 |
| Fiscal 2028 payments | 1,724.577 |
| Fiscal 2029 payments | 1,517.313 |
| Fiscal 2030 payments | 1,295.667 |
| Payments thereafter | 5,230.205 |
| Total future payments | 13,671.277 |
| Less interest implicit in future payments | −2,532.903 |
| Lease liability at January 30 | 11,138.374 |
The liability is smaller than total future payments because accounting converts those later payments into their value at the reporting date. The schedule excludes $222.2 million for signed leases that had not yet begun. It is not a July remaining-payment schedule.
Sources: Fiscal 2025 Form 10-K, Item 7, senior-note table and “Future Cash Requirements,” pp. 34–36; Item 7A, p. 41; Note 4, pp. 59–60; 2026 second-quarter Form 10-Q, Notes 4–5 and Item 3. The quarterly filing lists the same senior-note series and reports no material change in market-risk disclosures.
This analysis is for general information and explains the company’s business and financial statements. It is not investment advice or a recommendation to trade securities.