Dollar General's Traffic Continues to Buck Retail Trends, but Shares Are Fully Valued
Narrow-moat Dollar General's third-quarter results support its intangible assets and cost advantages, as the firm drove strong 4.3% comparable-store growth (both traffic and ticket were positive) and modest gross margin expansion (8 basis points to 29.9%), despite the competitive landscape. These results and time value of money warrant us to increase our $80 fair value estimate by a mid-single-digit percentage, but we now recommend investors wait for a better margin of safety. While we plan to r...Dollar General is a discount retailer. The company's consumables products includes paper and cleaning products, packaged food, perishables, snacks, health and beauty, pet, and tobacco products. The company's seasonal products include decorations, toys, batteries, small electronics, greeting cards, stationery, prepaid phones and accessories, gardening supplies, hardware, automotive and home office supplies. The company's home products include kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, bed and bath soft goods. The company's apparel includes casual everyday apparel, as well as socks, underwear, disposable diapers, shoes and accessories.
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Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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