Dollar General (DG) 10-K risk factor changes: FY2020 vs FY2019

Any factor that could adversely affect their disposable income could decrease our customers’ spending or cause them to shift their spending to our lower margin product choices, which could result in materially decreased sales [removed: and] [added: and/or] profitability.

Factors that could reduce our customers’ disposable income include but are not limited to high unemployment or underemployment levels or decline in real wages; inflation; [added: pandemics (such as the COVID-19 pandemic);] higher fuel, energy, healthcare and housing costs, interest rates, consumer debt levels, and tax rates; tax law changes that negatively affect credits and refunds; lack of available credit; and decreases in, or elimination of, government subsidies such as unemployment and [removed: food] [added: food/nutrition] assistance programs.

[removed: Many of the economic factors listed above, as well as commodity rates; transportation, lease and insurance costs; wage rates; foreign exchange rate fluctuations; measures that create barriers to or increase the costs of international trade] (including increased import duties or tariffs); changes in applicable laws and [removed: regulations;] [added: regulations (including tax laws related to the corporate tax rate);] and other economic factors, also could impair our ability to successfully execute our strategies and initiatives, as well as increase our cost of goods sold and selling, general and administrative expenses (including real estate costs), and may have other adverse consequences that we are unable to fully anticipate or control, all of which may materially decrease our sales or profitability.

We have short-term and long-term strategies and initiatives (such as those relating to merchandising, real estate and new store development, store [removed: formats,] [added: formats and concepts,] digital, shrink, sourcing, private brand, inventory management, supply chain, store operations, expense reduction, and technology) in various stages of testing, evaluation, and implementation, which are designed to continue to improve our results of operations and financial condition.

The effectiveness of these initiatives is inherently uncertain, even when tested successfully, and is dependent on consistency of training and execution, workforce stability, ease of [removed: execution,] [added: execution] and [added: scalability, and] the absence of offsetting factors that can influence results adversely.

[removed: Many of these factors are made even more challenging by the] [added: The] number and diverse geographic locations of our stores and distribution centers and our decentralized field [removed: management.][added: management also contribute to the challenging nature of these factors.]

Failure to achieve successful or cost-effective implementation of our initiatives could materially [added: and] adversely affect our business, results of operations and financial condition.

The success of our merchandising initiatives, particularly our non-consumable initiatives and efforts to increase sales of higher margin products within the consumables category, further depends in part upon our ability to predict the products that our customers will demand and to identify and timely respond to evolving trends in [added: consumer preferences and] demographic mixes in our [removed: markets and consumer preferences.][added: markets.]

[added: If we are unable to select and timely obtain] products that are attractive to customers and at costs that allow us to sell them at an acceptable profit, or to effectively market such products, it could result in materially decreased sales and profitability.

The success of our [removed: DG Fresh initiative, our] cold chain self-distribution initiative, [added: DG Fresh,] further depends in part on our ability to effectively transition these distribution operations from our current service providers without business disruption, as well as on the availability of certain supply chain resources, including temperature-controlled distribution centers, refrigerated transportation equipment, and drivers.

The success of our Fast Track initiative, which is designed to enhance our in-store labor productivity, on-shelf availability and customer convenience, further depends in part on [added: successful implementation and maintenance of the necessary technology,] customer interest and adoption of self-checkout, our ability to gain cost efficiencies and control shrink levels from the initiative, [removed: vendor cooperation,] and [removed: successful implementation and maintenance of the necessary technology.][added: vendor cooperation.]

Delays in or failure to complete a significant portion of our real estate projects, or failure to meet our financial expectations for these projects, could materially [added: and] adversely affect our growth and our profitability.

Our ability to timely open, relocate and remodel profitable stores and expand into additional market areas is a key component of our planned future growth and may depend in part on: the availability of suitable store locations and capital funding; the absence of entitlement process or occupancy delays, including zoning restrictions and moratoria on small box discount retail development [added: such as those] passed by [added: certain] local [removed: governments;] [added: governments in areas where we operate or seek to operate, which, to date, have not materially impaired our ability to complete our planned real estate projects or growth;] the ability to negotiate acceptable lease and development terms (for example, real estate development requirements and cost of building materials and labor), to cost-effectively hire and train [added: qualified] new personnel, especially store managers, and to identify and accurately assess sufficient customer demand; and general economic conditions.

We face intense competition that could limit our growth opportunities and materially [added: and] adversely affect our results of operations and financial condition.

Certain of our competitors have greater financial, distribution, marketing and other resources, and may be able to secure better arrangements with suppliers, than [removed: we can.][added: we.]

Competition is intense, and is expected to continue to be so, with certain competitors reducing their store locations while others enter or increase their presence in our geographic and product markets (including through the expansion of availability of delivery services) and expand availability of mobile, web-based and other digital [added: technologies to facilitate a more convenient and competitive online and in-store shopping experience.]

If our competitors or others were to enter our industry in a significant way, including through alliances or other business combinations, it could significantly alter the competitive dynamics of the retail marketplace and result in [removed: competitors with greatly improved competitive positions, which could materially affect our financial performance.]

There can be no assurance that we will be successful in our efforts to [added: contain or] reduce inventory shrinkage.

Our inventory balance represented approximately [removed: 55%] [added: 48%] of our total assets exclusive of goodwill, operating lease assets, and other intangible assets as of January [removed: 31, 2020.][added: 29, 2021.]

While we have implemented procedures and technology intended to protect such information and require appropriate controls of our [removed: service providers, cyberattackers] [added: vendors, external attackers] could compromise such controls and [removed: obtain] [added: result in unauthorized disclosure of] such information, as [removed: cyberattacks] [added: attacks] are becoming increasingly [removed: sophisticated] [added: sophisticated, may include attacks on our third-party business partners,] and do not always [added: or] immediately produce [removed: signs] [added: detectable indicators] of [removed: intrusion.][added: compromise.]

Moreover, inadvertent or malicious [removed: employee] [added: internal personnel] actions could result in a defeat of security measures and [added: a] compromise [added: of] our or our third-party vendors’ information systems.

Like other retailers, we and our vendors have experienced threats [removed: to] [added: to, and infrequent immaterial incidents involving,] data and systems, including by perpetrators of attempted random or targeted malicious [removed: cyberattacks,] [added: attacks;] computer [removed: viruses, worms, bot attacks] [added: malware, ransomware, bots,] or other destructive or disruptive [removed: software] [added: software;] and attempts to misappropriate our information and cause system failures and disruptions.

If [removed: cyberattackers] [added: attackers] obtain customer, employee or vendor passwords through unrelated third-party breaches, [added: and if impacted customers, employees, or vendors do not employ good online security practices (e.g., use the same password across different sites),] these passwords could be used to gain access to their information or accounts with [removed: us.][added: us in certain situations.]

Because we accept debit and credit cards for payment, we are subject to industry data protection standards and protocols, such as the Payment Card Industry Data Security Standards, issued by the Payment Card [added: Industry Security Standards Council.]

Nonetheless, we may be vulnerable to, and unable to detect and appropriately respond to, [added: cardholder] data security breaches and data loss, including [removed: cybersecurity] [added: successful] attacks [added: on applications, systems,] or [removed: other breaches of cardholder data.][added: networks.]

A significant security breach of any kind experienced by us or one of our vendors, which could be undetected for a period of time, or a significant failure by us or one of our vendors to comply with applicable privacy and information security laws, regulations and standards could expose us to risks of data loss, litigation, government enforcement actions, fines or penalties, credit card brand assessments, negative publicity and reputational harm, business disruption and costly response measures [removed: (for example,] [added: (e.g.,] providing notification to, and credit monitoring services for, affected individuals, as well as further upgrades to our security measures) which may not be covered by or may exceed the coverage limits of our insurance policies, and could materially disrupt our operations.

Any resulting negative publicity could significantly harm our reputation which could cause us to lose market share as a result of customers discontinuing the use of our e-commerce and mobile applications or debit or credit cards in our stores or not shopping in our stores altogether and could materially [added: and] adversely affect our business and financial performance.

Material damage or interruptions to our information systems as a result of external factors, staffing shortages or challenges in maintaining or updating our existing technology or developing or implementing new technology could materially [added: and] adversely affect our business and results of operations.

Additionally, such systems are subject to damage or interruption from power surges and outages, facility damage, physical theft, computer and telecommunications failures, inadequate or ineffective redundancy, malicious code (including [removed: computer viruses, worms,] [added: malware,] ransomware, or similar), [removed: cyberattacks (including] [added: successful attacks (e.g.,] account compromise; phishing; denial of [removed: service attacks;] [added: service;] and application, network or system vulnerability exploitation), software upgrade failures or code defects, natural disasters and human error.

[removed: Design defects or damage or interruption to these systems may require a] significant investment to [removed: fix] [added: repair] or replace, disrupt our operations, result in the loss or corruption of critical data, and harm our reputation, all of which could materially [added: and] adversely affect our business or results of operations.

The inability of these vendors, developers or us to continue to maintain and upgrade these systems and software programs could disrupt or reduce the efficiency of our operations [added: or retain vulnerability exploitation risk] if we were unable to convert to alternate systems in an efficient and timely manner and could expose us to greater risk of a [removed: cyberattack.][added: successful attack.]

In addition, costs and delays associated with the implementation of new or upgraded systems and technology, including the migration of applications to the [removed: cloud,] [added: cloud] or [added: our current implementation of our new point of sale system,] with maintenance or adequate support of existing systems also could disrupt or reduce the efficiency of our operations, fail to operate as designed, result in the potential loss or corruption of data or information, disrupt operations and affect our ability to meet business and reporting requirements and adversely affect our profitability.

Any disruption, unanticipated or unusual expense or operational failure related to this process [removed: (for example,] [added: (e.g.,] delivery delays, including as a result of pandemic outbreaks, or increases in transportation [removed: costs,] [added: costs (such as those we have experienced in fiscal 2020 and continue to experience),] including increased fuel costs, import freight costs, carrier or driver wages as a result of driver shortages; a decrease in transportation capacity for overseas [removed: shipments;] [added: shipments or port closures;] labor shortages; or work stoppages [removed: for] [added: or] slowdowns) could negatively impact sales and profits.

Labor shortages or work stoppages in the transportation industry or disruptions to the national and international transportation infrastructure that [removed: lead to delivery delays or that] necessitate our securing alternative labor or shipping suppliers could also increase our costs or otherwise negatively affect our business.

[removed: As of the date of this filing, we do not anticipate that] [added: The] supply chain disruptions [removed: either known or] [added: that we have] experienced to date as a result of the COVID-19 [removed: outbreak are likely to] [added: pandemic did not] have a material [added: negative] impact on our financial results in [added: fiscal] 2020.

However, [added: depending on] the [added: continued] extent [removed: to which] [added: and duration of] the COVID-19 [removed: outbreak may impact] [added: pandemic,] our distribution network, results of operations (including sales) or [removed: business in the] future [removed: is uncertain as the situation continues to evolve, and such impact could] [added: business may] be [removed: more significant.][added: materially and adversely impacted.]

In [removed: 2019,] [added: 2020,] our [removed: two] largest [added: supplier accounted for approximately 9% of our purchases, and our second and third largest] suppliers each accounted for approximately 8% of our purchases.

[removed: If one or more of our current sources of supply became unavailable, we believe we generally] would be able to obtain alternative sources, but it could increase our merchandise costs and supply chain lead time, result in a temporary reduction in store inventory levels, and reduce the selection and quality of our merchandise.

We directly imported approximately [removed: 6%] [added: 5%] of our purchases (measured at cost) in [removed: 2019,] [added: 2020,] but many of our domestic vendors directly import their products or components of their products.

Changes to the prices and flow of these goods [added: often are] for [removed: any reason,] [added: reasons beyond our control,] such as political [added: or civil] unrest, acts of war, currency fluctuations, disruptions in maritime lanes, port labor disputes, economic conditions and instability in countries in which foreign suppliers are located, the financial instability of suppliers, failure to meet our [added: terms and conditions or our] standards, issues with our suppliers’ labor practices or labor problems they may experience (such as strikes, stoppages or slowdowns, which could also increase labor costs during and following the disruption), the availability and cost of raw materials, pandemic outbreaks, merchandise quality or safety issues, transport availability and cost, increases in wage rates and taxes, transport [added: security, inflation, and other factors relating to suppliers and the countries in which they are located or from which they import.]

Business, Strategic and Competitive Risks

The COVID-19 pandemic has continued to impact our business, financial performance and financial condition and could have a material adverse impact on our business, financial performance and financial condition in the future.

The COVID-19 pandemic has resulted in widespread and continuing adverse impacts on, and volatility in, the global economy and has continued to impact our business, employees, customers, suppliers, and other business partners.

Considerable uncertainty exists regarding the extent to which the COVID-19 pandemic will continue, as well as the scope, duration and effectiveness of measures directed at containment and mitigation of the virus, including travel bans and restrictions, quarantines, shelter-in-place orders, school closures, vaccination rollouts, and business and government restrictions and shutdowns.

These measures taken by national, state and local government authorities to date have resulted in high levels of unemployment, are expected to have serious adverse impacts on domestic and foreign economies, and could have a significant adverse impact on our core customer and her spending, for an unknown length of time.

The potential effect of economic stabilization efforts, including additional government stimulus payments, food/nutrition assistance and enhanced unemployment benefits, is uncertain.

If customer spending on the goods we sell declines as a result of some or all of these factors, there could be a material adverse impact on our business and results of operations.

We have been classified as an essential business in all locations where we operate, and as such, our stores generally have remained open to serve our customers.

While none of the below has resulted in a material adverse impact on our business, financial performance or financial condition to date, we have experienced or are experiencing certain effects of the COVID-19 pandemic, including but not limited to, the following:

| | ● | Supply chain disruptions, including shipping and procurement delays of certain goods from international and domestic shipping origins, delivery delays to our stores as a result of COVID-19-related absenteeism in one of our distribution centers, which necessitated servicing those stores from other distribution centers for a limited period of time, and vendor restrictions on their sale to us of a significant percentage of certain of our core products; |

| --- | --- | --- |

| | ● | Reduced or no availability of certain products in our stores as a result of supply chain disruptions outlined above and extremely high customer demand for certain products which has outpaced available supply; |

| --- | --- | --- |

| | ● | Temporary store and distribution center closings in order to allow for deep cleanings as needed, as well as reduced store operating hours until early in the second quarter to allow for additional time to clean the stores and re-stock shelves; |

| --- | --- | --- |

| | ● | Increased distribution and transportation costs as a result of the effects outlined above, increased carrier rates and greater driver shortages, increased overtime pay expenses due to reduced labor availability, and demand for transportation services outpacing carrier supply; |

| --- | --- | --- |

| | ● | Increased incremental expenses for certain items, including supplies for enhanced cleaning protocols, personal protective equipment for employees in stores, distribution centers and corporate headquarters (e.g., gloves, masks, hand sanitizer), and installation of plexiglass barriers at store registers; |

| --- | --- | --- |

| | ● | In addition to the additional distribution overtime discussed above, increased labor expenses as a result of awarding approximately $167 million in employee appreciation bonuses, significantly increasing |

| --- | --- | --- |

| | | our hiring of new store employees, and the increased workload associated with the incremental sales volume; |

| --- | --- | --- |

| | ● | COVID-19 and remote-work oriented phishing and similar cybersecurity attack attempts; and |

| --- | --- | --- |

| | ● | Inability to perform physical inventories in our stores from mid-March through mid-May, which prevented us from completing all of our planned store physical inventories for fiscal 2020, the effect of which was immaterial for fiscal 2020. |

| --- | --- | --- |

Depending on the duration and severity of the COVID-19 pandemic, including whether there are additional “waves”, other additional periods of increases or spikes in the number of COVID-19 cases or mutations thereof and the availability, acceptance and efficacy of medical treatments and vaccines, which are uncertain and cannot be predicted, as well as governmental authorities’ responses and requirements related to the pandemic, including the pace and extent of the easing or removal of restrictions on businesses and customers when the pandemic does subside or the reinstitution of more stringent regulations before the pandemic subsides, these experienced effects could have a material adverse impact on our business, financial performance and financial condition in the future if they increase in number, duration, and/or magnitude.

We also could experience other effects that could aggravate or increase the likelihood of the risk factors set forth herein and/or result in a material adverse impact on our business, financial performance or financial condition, including but not limited to, the financial difficulties experienced by our suppliers or business partners, including the financial failure of one or more of our international steamship line vendors resulting in our inability to obtain our purchased goods in their possession; increased operating costs as a result of increased government regulations and mandates requiring us to provide wage increases or premiums to frontline employees (e.g., those imposed in certain counties in California and elsewhere), personal protective equipment or personal hygiene supplies to customers or to increase store and distribution center cleaning protocols, as well as increased store and/or distribution center closures as a result of increased government enforcement of any such new regulations and mandates; increased litigation expenses resulting from employee or customer lawsuits, including those related to the Company’s COVID-19 response and alleged employee or customer contraction; increased insurance costs, medical claims costs and workers’ compensation claim costs and the impact of regulatory and judicial changes in liability for workers’ compensation; and damage to our reputation if our response to the COVID-19 pandemic is perceived as inadequate or inappropriate.

Additionally, the COVID-19 pandemic may cause or accelerate a shift in our core customer’s behaviors, expectations and shopping trends, which could result in lost sales and market share if we are not able to successfully increase the pace of our strategic initiatives development, particularly our digital strategic initiatives, and if our current digital shopping offerings do not continue to compete effectively.

The extent to which the COVID-19 pandemic ultimately impacts our business, financial performance and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak (and any variants thereof), its severity, the actions to contain and mitigate the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

As a result, we may not be able to identify all risks ultimately faced from the COVID-19 pandemic and its aftermath.

Many of the economic factors listed above, as well as commodity rates; transportation, lease and insurance costs; wage rates (including the heightened possibility of increased federal, state and/or local minimum wage rates); foreign exchange rate fluctuations; measures that create barriers to or increase the costs of international trade

competitors with greatly improved competitive positions, which could materially affect our financial performance.

Operational Risks

Design defects, damage to, or interruption to these systems may require a

The COVID-19 pandemic disrupted the global and domestic transportation and distribution of goods and resulted in product delivery delays and higher delivery prices.

If one or more of our current sources of supply became unavailable, we believe we generally

Such changes could adversely affect our operations and profitability.

term inability to obtain or access technology needed to effectively run our business, disruption of our utility services or information systems, and damage to our reputation.

If we are unable to select and timely obtain

technologies to facilitate a more convenient and competitive online and in-store shopping experience.

Industry Security Standards Council.

The recent outbreak of the strain of COVID-19 has led various governments to take precautionary measures to limit the spread of the virus, including port closures and other restrictions, which could disrupt the global transportation and distribution of goods resulting in product delivery delays or higher delivery prices.

security, inflation, and other factors relating to suppliers and the countries in which they are located or from which they import, often are beyond our control and could adversely affect our operations and profitability.

and reputational damage.

performance could be materially adversely affected through an inability to make deliveries or provide other support functions to our stores and through lost sales.

We are [removed: among] the largest discount [removed: retailers] [added: retailer] in the United States by number of stores, with [removed: 16,368] [added: 17,266] stores located in [removed: 45] [added: 46] states as of February [removed: 28, 2020,] [added: 26, 2021,] with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States.

Our core customers are often among the first to be affected by negative or uncertain economic conditions and among the last to feel the effects of improving economic [removed: conditions] [added: conditions,] particularly when trends are inconsistent and of an uncertain duration.

The primary macroeconomic factors that affect our core customers include the unemployment and underemployment rates, wage growth, changes in U.S. and global trade policy (including price increases [added: resulting] from [added: the imposition of] tariffs), and changes to certain government assistance programs, such as the Supplemental Nutrition Assistance Program.

Additionally, our customers are impacted by increases in those expenses that generally comprise a large portion of their household [removed: budget,] [added: budgets,] such as rent, healthcare and fuel prices.

We remain committed to [removed: the following] [added: our] long-term operating priorities as we consistently strive to improve our performance while retaining our customer-centric [removed: focus: 1) driving profitable sales growth, 2) capturing growth opportunities, 3) enhancing our position as a low-cost operator, and 4) investing in our people as a competitive advantage.][added: focus.]

Several of our [added: strategic and other] sales-driving initiatives are also designed to capture growth opportunities and are discussed in more detail below.

Historically, our sales [removed: of consumables,] [added: in our consumables category,] which tend to have lower gross margins, have been the key drivers of net sales and customer traffic, while sales [removed: of non-consumables,] [added: in our non-consumables categories,] which tend to have higher gross margins, have contributed to more profitable sales growth and an increase in average transaction amount.

[removed: Our] [added: Prior to 2020, our] sales mix [removed: has] [added: had] continued to shift [removed: slightly] toward consumables, and, within consumables, [removed: slightly] toward lower margin departments such as perishables.

We continue to make progress on and invest in certain strategic initiatives that we believe will help drive profitable sales [removed: growth] [added: growth, both with new] and [added: existing customers, and] capture long-term growth opportunities.

[removed: This merchandising strategy, which is continuing to evolve and help shape our approach to non-consumable categories throughout the chain,] [added: Our non-consumables initiative, or “NCI,”] offers a new, differentiated and limited assortment that will change throughout the year.

As we extend this initiative more broadly, as well as incorporate certain related merchandising efforts throughout our chain, our goal is to [removed: continue to improve the shopping experience] [added: provide our customers with a broader, even more relevant non-consumables merchandise assortment,] while [removed: delivering] [added: continuing to deliver] exceptional value within key areas of our [removed: non-consumable] [added: non-consumables] categories.

We are continuing our rollout of the “DG Fresh” initiative, a self-distribution model for [removed: fresh and] frozen [added: and refrigerated] products that is designed to [removed: enhance sales,] reduce product costs, [added: enhance item assortment,] improve our in-stock [removed: position] [added: position,] and enhance [removed: item assortment.][added: sales.]

Tariffs on products from China, as applied to both our direct imports and domestic purchases, did not have a net material impact on our financial results in [removed: 2019.][added: 2020, and we do not expect a net material impact in 2021.]

[removed: However, as] [added: As] noted above, changes in trade policy that result in higher prices for our customers may negatively impact their budgets, and consequently, their spending, and additional increases in tariff rates or expansion of products subject to tariffs may have a more significant impact on our future business.

In [removed: 2019,] [added: 2020,] we opened [removed: 975] [added: 1,000] new stores, remodeled [removed: 1,024] [added: 1,670] stores, and relocated [removed: 100] [added: 110] stores.

For [removed: 2020,] [added: 2021,] we plan to open approximately [removed: 1,000] [added: 1,050] new [removed: stores,] [added: stores (including any pOpshelf stores),] remodel approximately [removed: 1,500] [added: 1,750] stores, and relocate approximately [removed: 80 stores] [added: 100 stores,] for a total of [removed: 2,580] [added: 2,900] real estate projects.

We continue to innovate within our channel and are able to utilize the most productive of our various [added: Dollar General] store formats based on the specific market opportunity.

We expect that our traditional 7,300 square foot store format will continue to be the primary store layout for new stores in [removed: 2020.][added: 2021.]

We expect approximately [removed: 1,125] [added: 75%] of [removed: the] [added: our] planned [removed: 1,500] remodels in [removed: 2020] [added: 2021] to [removed: use a] [added: feature our] higher-cooler-count store format that enables us to offer an increased selection of perishable [removed: items, with the traditional store format the primary store layout for the remainder of the real estate projects.][added: items.]

The [removed: acceleration of remodels] [added: innovation] in [removed: 2020 and the increased usage of the higher-cooler-count] [added: store] formats is expected to allow us to capture additional growth opportunities within our existing markets.

[removed: In addition, our] [added: Our] smaller format store (less than 6,000 square feet) is expected to allow us to capture growth opportunities in urban areas.

[removed: We continue to incorporate] [added: These] lessons [removed: learned from our various store formats and layouts into our existing store base] [added: contribute to innovation in developing new formats,] with a goal of driving increased customer traffic, average transaction amount, same-store sales and overall store productivity.

Nonetheless, we seek to maintain flexibility to invest in the business as necessary to enhance our long-term [added: competitiveness and] profitability.

We also have launched “Fast Track”, an initiative aimed at further enhancing our convenience proposition and in-stock position as well as increasing labor [removed: productivity] [added: efficiencies] within our stores.

We [removed: have] completed the sorting process optimization at all of our non-refrigerated distribution [removed: centers.][added: centers in 2019.]

These and [removed: certain] [added: the] other strategic initiatives [added: discussed above] will require us to incur upfront expenses for [removed: which, in some respects,] [added: which] there may not be an immediate [removed: or acceptable] return in terms of sales or enhanced profitability.

Certain of our operating expenses, such as wage rates and occupancy costs, have continued to increase in recent years, due primarily to market [removed: forces.][added: forces, including increases in minimum wage rates.]

Our [removed: employees] [added: diverse teams] are a competitive advantage, and we proactively seek ways to continue investing in [removed: them.][added: their development.]

Our goal is to create an environment that [removed: attracts] [added: attracts, develops,] and retains talented personnel, particularly at the store [added: manager] level, because employees who are promoted from within our company generally have longer tenures and are greater contributors to improvements in our financial performance.

To further enhance shareholder returns, we repurchased shares of our common stock and paid quarterly cash dividends throughout [removed: 2019.][added: 2020.]

In [removed: 2020,] [added: 2021,] we [removed: intend] [added: expect] to continue our share repurchase [removed: activity,] [added: activity] and to pay quarterly cash dividends, subject to Board discretion and approval.

Net sales per square foot is calculated based on total sales for the preceding 12 months as of the ending date of the reporting period divided by the average selling square footage during the period, including the end of the fiscal year, the beginning of [removed: the fiscal year, and the end of each of our three interim fiscal quarters.]

A continued focus on our four operating priorities as discussed above, coupled with [added: pandemic-related sales and other impacts (additional discussion below) and] strong cash flow management [removed: and share repurchases] resulted in [removed: solid] [added: strong] overall operating and financial performance in [removed: 2019] [added: 2020] as [added: compared to 2019, as set forth below.]

| | ● | Net sales in [removed: 2019] [added: 2020] increased [removed: 8.3%] [added: 21.6%] over [removed: 2018.] [added: 2019.] Sales in same-stores increased [removed: 3.9%,] [added: 16.3%,] primarily due to increases in average transaction [removed: amount and customer traffic.] [added: amount.] Average sales per square foot in [removed: 2019] [added: 2020] were [removed: $237 compared to $231 in 2018.] [added: $273.] |

| | ● | Our gross profit rate increased by [removed: 14] [added: 117] basis points due primarily to [added: lower markdowns as a percentage of sales and] higher initial markups on inventory purchases. |

[removed: | | ● | SG&A increased by 9 basis points primarily] [added: In addition, we recorded expenses of $31.0 million in 2019] reflecting our estimate for the settlement of [removed: certain] [added: significant] legal matters. [removed: |]

| | ● | Operating profit increased [removed: 8.8%] [added: 54.4%] to [removed: $2.30] [added: $3.55] billion in [removed: 2019] [added: 2020] compared to [removed: $2.12] [added: $2.30] billion in [removed: 2018.] [added: 2019.] |

[removed: | | ● |] The [removed: increase in the] effective income tax rate [removed: to 22.2%] [added: was higher] in 2019 [removed: from 21.1% in 2018 was due] primarily [added: due] to [added: an increase in income taxes resulting from] changes in state income tax laws and [added: a federal] income tax [removed: benefits] [added: benefit] arising from the Tax Cuts and Jobs Act in 2018 that did not reoccur in 2019. [removed: |]

| | ● | We reported net income of [removed: $1.71] [added: $2.66] billion, or [removed: $6.64] [added: $10.62] per diluted share, for [removed: 2019] [added: 2020] compared to net income of [removed: $1.59] [added: $1.71] billion, or [removed: $5.97] [added: $6.64] per diluted share, for [removed: 2018.] [added: 2019.] |

[removed: | | ● | We generated approximately $2.24 billion of cash] [added: Cash] flows from operating activities [added: were $2.24 billion] in 2019, [removed: an] [added: which represents a $94.4 million] increase [removed: of 4.4%] compared to 2018. [removed: |]

Impact of COVID-19

The COVID-19 (coronavirus) pandemic has resulted in widespread and continuing impacts on the global economy and has affected our business, as well as our customers, suppliers, and other business partners.

We have been classified as an essential business in all locations where we operate, and as such, our stores have generally remained open to serve our customers.

In responding to the pandemic and its effects, our priority has been the health and safety of our employees and customers.

In order to serve our employees and customers during this time while prioritizing their well-being, we have taken a variety of actions across our stores, distribution centers and store support center, including (as applicable): enhancing cleaning protocols, designating one hour each day for our elderly customers to shop our stores with limited crowds, implementing social distancing measures, providing personal protective equipment (e.g., gloves, masks and hand sanitizer) for employees, providing employee temperature checks at our distribution facilities, installing plexiglass barriers at registers, providing paid time off for those who received a COVID-19 diagnosis, or who were required to care for an immediate family or household member who received a COVID-19 diagnosis, and providing a one-time payment for hourly frontline employees who receive a complete COVID-19 vaccination.

In early March 2020, we began seeing heightened demand from customers, particularly for consumable products such as paper, food and cleaning products, which continued throughout 2020, although with some variability as to the volume and product mix.

Beginning in April, we also saw a significant increase in demand in many non-consumable products, including home, seasonal and apparel, resulting in an overall significant mix shift into non-consumable categories in the remainder of 2020.

Also beginning in early March 2020, many new customers began shopping with us for their everyday essential needs, and we are working to retain them going forward.

We have also seen a shift in customer behavior toward trip consolidation, as customers shopped our stores less frequently than in the same period in 2019, but purchased a larger average basket amount.

We have seen a continuation of these general trends toward trip consolidation and larger basket size.

To address the increased demand, we increased our hiring of new store associates in March and April of 2020, and have worked and continue to work with suppliers to incorporate new items in stores to meet the essential needs of customers while addressing certain product shortages and vendor allocation limitations, some of which we expect to persist through at least the first half of 2021.

We believe that this increased customer demand significantly benefited our results of operations, and in particular, sales, gross profit, operating income and net income for fiscal 2020.

Although we incurred additional payroll related expenses throughout fiscal 2020, including employee appreciation bonuses of approximately $167 million, increased distribution and transportation costs, and other costs to meet the significant customer demand and to protect the health and safety of our employees and customers, these costs were more than offset by the incremental sales.

The overall net impact of the pandemic to operating income and net income in 2021 may be less favorable due to the moderating positive impact to our net sales and our anticipation that some of these incremental costs, particularly those related to health and safety measures, will continue into 2021.

We expect to continue to be affected, although the extent and duration is unknown, by the COVID-19 pandemic and its effects on the economy in a variety of ways, potentially including changing consumer demand (whether higher or lower) in certain product categories, supply chain interruptions, increased distribution and transportation costs, increased payroll expenses, and increased costs in an effort to maintain safe work and shopping environments.

Additionally, the vast shutdown of, and/or significant operating limitations imposed upon, many businesses in the United States has resulted in high levels of unemployment, which, along with current and potential school closures and operating limitations, could have a significant adverse impact on our core customers for an unknown length of time.

The potential for additional economic stabilization efforts, including additional government stimulus payments and enhanced unemployment benefits and other government assistance and the effects thereof, are uncertain.

In addition to the items described above, we expect the current adverse global economic conditions

caused by the COVID-19 pandemic to continue in at least the near term, potentially resulting in continued elevated unemployment, reduced economic activity, and capital markets volatility.

We may experience adverse effects on our business, results of operations and cash flows from a recessionary economic environment that may persist after the COVID-19 pandemic has moderated.

As a result, the quarterly cadence of our results of operations, which varied from historical patterns in fiscal 2020, may continue to do so in fiscal 2021.

Due to the significant uncertainty surrounding the COVID-19 pandemic and its effects, there may be consequences that we do not anticipate at this time or that develop in unexpected ways.

We will continue to monitor the evolving situation, and we will continue to take actions as necessary to serve our employees, customers, communities and shareholders.

​

In 2020, our customers experienced impacts to many of these factors, as detailed above under “Impact of COVID-19”.

These priorities include: 1) driving profitable sales growth, 2) capturing growth opportunities, 3) enhancing our position as a low-cost operator, and 4) investing in our diverse teams through development, empowerment and inclusion.

Although this trend did not occur in 2020 (as discussed above under “Impact of COVID-19”), we continue to expect some sales mix challenges to persist, and we expect the trend toward consumables will resume in 2021 and beyond.

Several of our initiatives, including certain of those discussed

below, are intended to address these mix challenges; however, there can be no assurances that these efforts will be successful.

This technology includes our Dollar General app, which contains a variety of tools to enhance the in-store shopping experience.

Additionally, DG Pickup, which is a buy online, pickup in-store initiative aimed at offering another convenient access point for customers, is now available in more than 17,000 stores across the chain.

NCI is continuing to evolve and help shape our approach to non-consumables categories throughout the chain and is contributing to improved overall sales and gross margin performance in the stores where it is offered.

Additionally, as we expand this offering, we plan to incorporate the full NCI set in certain stores as well as an “NCI Lite” version in others so as to reach a greater number of stores and customers more quickly.

The NCI Lite version incorporates the majority of the NCI assortment, but without the footprint and display changes in the store.

We plan to significantly expand the number of stores with either the full NCI or NCI Lite version in 2021, with a goal of more than 11,000 stores by the end of fiscal 2021.

Additionally, we recently introduced pOpshelf, a unique retail concept that incorporates certain of the lessons learned from NCI in a differentiated format that is focused on categories such as seasonal and home décor, health and beauty, home cleaning supplies, and party and entertainment goods.

Our goal is to operate up to 50 pOpshelf locations by the end of fiscal 2021.

By the end of fiscal 2021, we plan to complete our initial rollout of DG Fresh distribution facilities, which will serve all stores across the chain.

DG Fresh contributed to our strong sales performance in 2020, driven by higher in-stock levels and the introduction of new products in select stores.

In addition, DG Fresh benefitted gross profit in 2020 through improved initial markups on inventory purchases, which were partially offset by increased distribution and transportation costs.

While we expect some sales mix challenges to persist, certain of our initiatives are intended to address these trends, although there can be no assurance we will be successful in reversing them.

Additionally, our refreshed approach to our non-consumable product offerings has been implemented in approximately 2,400 stores as of the end of 2019.

We currently operate five DG Fresh distribution facilities, which served more than 6,000 stores as of February 28, 2020.

We believe we can mitigate the potential sales and margin impact of such increased tariffs on our financial results in 2020 through various sourcing, merchandising and pricing efforts.

There can be no assurance we will be successful in our efforts to mitigate the impacts of existing or future tariffs in whole or in part, including but not limited to any impacts on customer spending.

We have limited insight into the extent to which our business may be impacted by the COVID-19 coronavirus outbreak, and there are many unknowns.

While we currently expect delays in the receipt of certain goods in 2020 as a result of this outbreak, we do not currently anticipate a material impact to our financial results in 2020 due to these delays.

Further delays in the receipt of goods, or other unanticipated impacts to our supply chain, including on direct imports or goods purchased domestically, our stores or our customers, could have a more significant impact on our future business (including sales), and we are continuing to monitor this evolving situation.

Additionally, the majority of both new stores and remodels will incorporate higher-capacity coolers.

To support our new store growth and drive productivity, we have continued to make investments in our traditional distribution center network for non-refrigerated merchandise.

We began shipping from our distribution centers in Longview, Texas and Amsterdam, New York in January 2019 and December 2019, respectively.

Additionally, we have launched the self-checkout pilot in a select number of stores.

compared to 2018, as set forth below.

*​*

The increase in same-store sales primarily reflects an increase in average transaction amount relative to 2017.

Same-store sales results in 2018 for the three non-consumables categories, when aggregated, were positive.

Of our four major merchandise categories, the consumables category, which generally has a lower gross profit rate than the other three categories, is our largest category and has continued to become a larger percentage

of our total sales.

Because of the impact of sales mix on gross profit, we continually review our merchandise mix and strive to adjust it when appropriate.

Higher markdowns, a greater proportion of sales of consumables, which generally have a lower gross profit rate than our other product categories, and sales of lower margin products comprising a higher proportion of consumables sales, as well as increases in transportation costs and an increased LIFO provision reduced the gross profit rate.

These factors were partially offset by an improved rate of inventory shrinkage and higher initial markups on inventory purchases.

We recorded expenses of $31.0 million in 2019 reflecting our estimate for the settlement of significant legal matters discussed in Note 7 to the consolidated financial statements.

SG&A as a percentage of sales decreased by 1 basis point, rounding to 22.2% in both 2018 and 2017.

The 2018 amounts reflect a reduction in repairs and maintenance expenses which were offset by occupancy costs and depreciation expenses, each of which increased at a rate greater than the increase in net sales.

The 2018 amounts reflect an increase in hurricane and other disaster-related expenses of approximately $14.3 million compared to 2017.

The 2017 amounts include costs of $24.0 million related to the closure of 35 underperforming stores, primarily expenses for remaining lease liabilities.

Interest expense increased $0.7 million to $100.6 million in 2019 compared to 2018, and increased $2.8 million to $99.9 million in 2018 compared to 2017.

The effective income tax rate was higher in 2019 primarily due to an increase in income taxes resulting from changes in state income tax laws and a federal income tax benefit arising from the Tax Cuts and Jobs Act (the “TCJA”) in 2018 that did not reoccur in 2019.

The effective income tax rate was higher in 2018 primarily due to the one-time remeasurement of the federal portion of our deferred tax assets and liabilities at 21% in 2017, which was offset by the reduction in the current federal tax rate from 33.7% in 2017 to 21% in 2018.

Our 2017 provision for income taxes reflected an estimate due to the changes in the federal income tax law arising from the TCJA, signed into law on December 22, 2017.

The provisional tax benefit consisted of $310.8 million related to the one-time remeasurement of the federal portion of our deferred tax assets and liabilities at the 21% rate and $24.2 million related to the reduced statutory tax rate of 33.7%, compared to 35% in prior years.

Subsequent to the signing of the TCJA, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which allowed companies to record provisional amounts during a measurement period not to extend beyond one year after the enactment date while the accounting impact is still under analysis.

In 2018, we concluded our analysis of the accounting impact of the TCJA pursuant to SAB 118 and recorded immaterial adjustments related to our 2017 provision for income taxes.

We experienced minimal overall commodity cost inflation or deflation in 2017.

As of January 31, 2020, our consolidated balance sheet reflected outstanding unsecured CP Notes of $425.2 million classified as long-term obligations due to our intent and ability to refinance these obligations as long-term debt.

As of January 31, 2020, the consolidated outstanding CP Notes had a weighted average borrowing rate of 1.7%.

supplemented and amended, the “Senior Indenture”).

| Long-term debt obligations | ​ | $ | 2,930,095 | ​ | $ | 425,755 | ​ | $ | 1,190 | ​ | $ | 901,300 | ​ | $ | 1,601,850 | ​ |

| Interest(a) | ​ | | 558,518 | ​ | | 101,257 | ​ | | 187,873 | ​ | | 135,422 | ​ | | 133,966 | ​ |

| Self-insurance liabilities(b) | ​ | | 238,254 | ​ | | 106,911 | ​ | ​ | 85,160 | ​ | ​ | 29,370 | ​ | ​ | 16,813 | ​ |

[removed: Our] [added: In recent years, our] principal interest rate exposure [removed: relates to] [added: has been from] outstanding [removed: amounts] [added: borrowings] under our Revolving Facility as well as our commercial paper program.

As of January [removed: 31, 2020,] [added: 29, 2021,] we had [added: no] consolidated borrowings [removed: of $425.2 million] under our commercial paper program and no borrowings outstanding under our Revolving Facility.

As of January [removed: 31, 2020,] [added: 29, 2021,] no such interest rate swaps were outstanding and, as a result, we [removed: are exposed] [added: will have exposure] to fluctuations in variable interest rates [added: for any future amounts borrowed] under the Revolving Facility and our commercial paper program.

Based on our variable rate borrowing levels as of January 31, [removed: 2020 and February 1, 2019,] [added: 2020,] the annualized effect of a one percentage point increase in variable interest rates would have resulted in a pretax reduction of our earnings and cash flows of approximately $4.3 million in [removed: 2019 and $3.7 million in 2018.][added: 2019.]

At January 29, 2021, our primary interest rate exposure was from changes in interest rates on our variable rate investment holdings, which were classified as cash and cash equivalents in our consolidated financial statements.

The increase in cash and cash equivalents was driven primarily by our issuance of $1.5 billion of senior unsecured notes during the first quarter of 2020 as we sought to strengthen liquidity as a result of the continued uncertainty generated by the COVID-19 pandemic.

Based on our variable rate cash investment balance of $1.1 billion at January 29, 2021, the annualized effect of a 0.1 percentage point decrease in interest rates would have resulted in a pre-tax reduction of our earnings and cash flows of approximately $1.1 million in 2020.

At January 31, 2020, our primary interest rate exposure was from changes in interest rates on our variable interest rate debt.

We are among the largest discount retailers in the United States by number of stores, with [removed: 16,368] [added: 17,266] stores located in [removed: 45] [added: 46] states as of February [removed: 28, 2020,] [added: 26, 2021,] with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States.

Our long-term operating priorities [removed: remain:] [added: are:] 1) driving profitable sales growth, 2) capturing growth opportunities, 3) enhancing our position as a low-cost operator, and 4) investing in our [removed: people as a competitive advantage.][added: diverse teams through development, empowerment and inclusion.]

[removed: For more information on these operating priorities, see the “Executive] Overview” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in Part II, Item 7 of this report.

In [removed: 2019,] [added: 2020,] we achieved our [removed: 30th] [added: 31st] consecutive year of positive same-store sales growth.

We believe that this growth, which has taken place in a variety of economic conditions, is a result of our compelling value and convenience proposition, although no assurances can be given that we will continue to achieve positive same-store sales growth in any given [removed: year.][added: year and we currently believe it is unlikely that we will achieve positive same-store sales growth in 2021 as a result of the unusually high sales results we experienced in 2020.]

Every [removed: day!”] [added: day!”®] summarizes our appeal to customers.

We believe our ability to effectively deliver both value and convenience allows us to succeed in small markets with [added: limited shopping alternatives, as well as in larger and more competitive markets.]

| | ● | _Time-Saving Shopping Experience._ We strive to provide customers with a highly convenient, easy to navigate shopping experience. Our small-box stores make it easier to get in and out quickly. Our product offering includes most necessities, such as basic packaged and refrigerated or frozen food and dairy products, cleaning supplies, paper products, health and beauty care items, [removed: tobacco products,] greeting cards and other stationery items, basic apparel, housewares, hardware and automotive supplies, among others. Our convenient hours and broad merchandise offering allow our customers to fulfill their requirements for basic goods and minimize their need to shop elsewhere. |

Our attractive store economics, including a relatively low initial investment and simple, low-cost operating model, [added: and our variety of store formats] have allowed us to grow our store base to current levels and provide us significant opportunities to continue our profitable store growth strategy.

Consumables [removed: include] [added: is our largest merchandise category and includes] paper and cleaning products (such as paper towels, bath tissue, paper dinnerware, trash and storage bags, [added: disinfectants,] and laundry); packaged food (such as cereals, canned soups and vegetables, condiments, spices, sugar and flour); perishables (such as milk, eggs, bread, refrigerated and frozen food, beer and wine); snacks (such as candy, cookies, crackers, salty snacks and carbonated beverages); health and beauty (such as over-the-counter medicines and personal care products including soap, body wash, shampoo, cosmetics, dental hygiene and foot care products); pet (such as pet supplies and pet food); and tobacco products.

| ​ | | [removed: 2019] [added: 2020] | | [removed: 2018] [added: 2019] | | [removed: 2017] [added: 2018] | |

| Consumables | | [removed: 78.0] [added: 76.8] | % | [removed: 77.5] [added: 78.0] | % | [removed: 76.9] [added: 77.5] | % |

| Seasonal | | [removed: 11.7] [added: 12.1] | % | [removed: 11.9] [added: 11.7] | % | [removed: 12.1] [added: 11.9] | % |

| Home products | | [removed: 5.8] [added: 6.5] | % | [removed: 5.9] [added: 5.8] | % | [removed: 6.0] [added: 5.9] | % |

| Apparel | | [removed: 4.5] [added: 4.6] | % | [removed: 4.7] [added: 4.5] | % | [removed: 5.0] [added: 4.7] | % |

We generally locate our stores and plan our merchandise selections to best serve the needs of our core customers, the low and fixed income households often underserved by other retailers, and we are focused on helping them make the most of their [removed: spending dollars.]

We directly imported approximately [removed: 6%] [added: 5%] of our purchases at cost in [removed: 2019.][added: 2020.]

[removed: We consistently have been able to obtain sufficient quantities of core merchandise and believe that, if one or more of our current sources of supply became unavailable, we generally would be able to obtain alternative sources; however, such alternative] [added: Alternative] sources could increase our merchandise costs and supply chain lead time and expenses, result in a temporary reduction in store inventory levels, reduce our selection, or reduce the quality of our merchandise, and an inability to obtain alternative sources could adversely affect our sales.

Our stores are currently supported by distribution centers for [added: both refrigerated and] non-refrigerated merchandise located strategically throughout our geographic footprint.

Most of our merchandise flows through our distribution centers and is delivered to our stores by [added: our private fleet and by] third-party trucking firms, utilizing our trailers.

[removed: Our] [added: The nature of our] business is somewhat seasonal.

Our direct competitors include Family Dollar, Dollar Tree, Big Lots, 99 Cents Only and various local, independent operators, as well as Walmart, Target, Kroger, Aldi, [removed: Lidl,] Walgreens, CVS, and [removed: RiteAid,] [added: Rite Aid,] among others.

Certain of our competitors have greater financial, distribution, marketing and other resources than we do and may be able to secure better arrangements from suppliers than we [removed: can.]

Purchasing large volumes of merchandise within our focused assortment in each merchandise category allows us to keep our average product [added: costs low, contributing to our ability to offer competitive everyday low prices to our customers.]

As of February [removed: 28, 2020,] [added: 26, 2021,] we employed approximately [removed: 143,000] [added: 158,000] full-time and part-time employees, including divisional and regional [removed: managers, district managers, store managers, other store personnel and distribution center and administrative personnel.]

We own marks that are registered with the United States Patent and Trademark Office and are protected under applicable intellectual property [removed: laws.][added: laws, including, without limitation, Dollar General®, DG®, Clover Valley®, and trueliving® along with variations and formatives of these trademarks.]

We also hold an exclusive license to the Rexall brand through at least March 5, [removed: 2026] [added: 2029] and the Believe Beauty brand through at least March 23, 2022.

These documents are available free of charge to investors on or through the Investor Information section of our website [added: (https://investor.dollargeneral.com)] as soon as reasonably practicable after we electronically file them with or furnish them to the SEC.

COVID-19 Pandemic

​

Throughout 2020, the COVID-19 (coronavirus) pandemic resulted in widespread and continuing impacts on the global economy and has affected our business, as well as our customers, suppliers, and other business partners.

In early March 2020, we began seeing heightened demand from customers, particularly for consumable products such as paper, food, and cleaning products.

Shortly thereafter, we also saw a significant increase in demand for many non-consumable products, including home, seasonal and apparel, resulting in a significant overall mix shift into non-consumable categories.

We have also seen a shift in customer behavior toward trip consolidation, as customers are shopping our stores less frequently than in the same period in 2019, but purchased a larger average basket amount.

To address the increased demand, we increased our hiring of new store associates and worked with suppliers to incorporate new items in stores to meet the essential needs of customers while addressing certain product shortages and vendor allocation limitations.

We incurred significant incremental expenses related to the pandemic, including appreciation bonuses for retail, distribution and transportation employees, as well as for health and safety measures.

We expect to continue to be affected, although the extent and duration is unknown, by the COVID-19 pandemic and its effects on the economy in a variety of ways, potentially including changing consumer demand (whether higher or lower) overall and in certain product categories, supply chain interruptions, increased distribution and transportation costs, and increased costs in an effort to maintain safe work and shopping environments.

For more information on these operating priorities, see the “Executive

| 2020 | | 16,278 | | 1,000 | | 101 | | 899 | | 17,177 | ​ |

spending dollars.

Our three largest suppliers accounted for approximately 9%, 8%, and 8%, respectively, of our purchases in 2020.

In 2020, COVID-19 caused disruptions in our supply chain, making it more difficult to obtain certain products in sufficient quantities to meet customer demand and increasing distribution and transportation costs.

We anticipate these COVID-19 effects to persist to some degree through at least the first half of 2021, although the ultimate extent and duration of the COVID-19 pandemic and its effects are unknown.

Prior to 2020, we have generally been able to obtain sufficient quantities of core merchandise and in cases where one or more of our current sources of supply became unavailable, we generally have been able to obtain alternative sources.

Generally, our operating profit has been greater in the fourth quarter, which includes the Christmas selling season, as compared with operating profit in each of the first three quarters of our fiscal year.

Consumer behavior driven by the COVID-19 pandemic has resulted in a departure from seasonal norms we have experienced in recent years and may continue to disrupt the historical quarterly cadence of our results of operations for an unknown period of time.

can.

Our Intellectual Property

Human Capital Resources

At Dollar General, a foundational element in how we operate is exemplified in our fourth operating priority – Investing in our diverse teams through development, empowerment and inclusion.

Building on our core value of respecting the dignity and differences of others, our goal is to create a work environment where each employee is encouraged and empowered to bring their unique perspective and voice to work each day.

Based on a talent philosophy of “Attract, Develop, and Retain”, whether an individual works in a store, a distribution center, our store support center or our international sourcing offices, over the last 80+ years, we have helped millions of individuals start and progress in their careers, providing employees with numerous opportunities to gain new skills and develop their talents, supported by our award-winning training and development programs.

_Attract_

We seek to provide market competitive compensation and benefits packages that attract talent to the organization and then retain and incent them for performance.

Although eligibility for and the level of benefits vary depending on the employee’s full-time or part-time status, compensation level, date of hire, and/or length of service, the broad range of benefits we provide or make available may include: medical, prescription, telemedicine, dental and vision plans; flexible spending accounts; disability insurance; 401(k) plan; paid vacation; employee assistance program with access to legal assistance and counseling; healthy lifestyle and disease management programs; a broad range of discounts for products and services; parental leave; adoption assistance; and service award recognition.

To help measure the success of our overall employee compensation and benefits programs, we monitor employee applicant flow and staffing levels across the organization, as well as employee turnover, particularly at the store manager level.

​

_Develop_

​

As a testament to our employee development efforts, in February 2021, we were inducted into Training magazine’s Hall of Fame, following two consecutive years as the magazine’s top training and development program and rounding out 10 consecutive years among its Top 100 list.

In 2020, we estimate we invested nearly three million training hours in our employees to promote their education and development.

Our internal promotion rate helps us measure the success of our development programs.

managers, district managers, store managers, other store personnel and distribution center and administrative personnel.

As of the end of 2020, approximately 73% of store managers and thousands of additional employees, including several members of our senior leadership, have been promoted from within our organization.

_Retain_

​

To ensure we are creating an environment where our employees feel respected, safe, empowered, and motivated, we regularly monitor retention and engagement levels across the organization through a variety of means, working to understand what is important to our workforce and how we can best continue to meet their evolving needs.

Compliance with Governmental Regulations

limited shopping alternatives, as well as in larger and more competitive markets.

Consumables is our largest merchandise category and has continued to become a larger percentage of our total sales as indicated in the table below.

| 2017 | | 13,320 | | 1,315 | | 101 | | 1,214 | | 14,534 | ​ |

Our two largest suppliers each accounted for

approximately 8% of our purchases in 2019.

We also own more than 300 semi-trailer trucks with which we transport our merchandise.

Generally, our most profitable sales mix occurs in the fourth quarter, which includes the Christmas selling season.

We typically purchase substantial amounts of inventory and incur higher shipping and payroll costs in the third quarter in anticipation of increased sales activity during the fourth quarter.

See Note 12 to the consolidated financial statements for additional information.

costs low, contributing to our ability to offer competitive everyday low prices to our customers.

Our Employees

We have increasingly focused on recruiting, training, motivating and retaining employees, and we believe that the quality, performance and morale of our employees continue to be an important part of our success in recent years.

We believe our overall relationship with our employees is good.

Our Trademarks

For the fiscal year ended January [removed: 31, 2020,] [added: 29, 2021,] or

The aggregate market value of the registrant’s common stock outstanding and held by non-affiliates as of [removed: August 2, 2019] [added: July 31, 2020] was [removed: $34.3] [added: $37.7] billion calculated using the closing market price of the registrant’s common stock as reported on the NYSE on such date [removed: ($133.69).][added: ($190.40).]

The registrant had [removed: 251,941,312] [added: 239,264,252] shares of common stock outstanding as of March 12, [removed: 2020.][added: 2021.]

Certain of the information required in Part III of this Form 10-K is incorporated by reference to the registrant’s definitive proxy statement to be filed for the Annual Meeting of Shareholders to be held on May [removed: 27, 2020.][added: 26, 2021.]

| [INTRODUCTION](#INTRODUCTION_973018) | | [added: |] ​ |

| [PART I](#PARTI_339286) | ​ | [added: |] ​ |

| ​ | [ITEM 1. BUSINESS](#ITEM1BUSINESS_302968) | [added: |] 4 |

| ​ | [ITEM 1A. RISK FACTORS](#RISKFACTORS) | [removed: 9] | [added: 10 |]

| ​ | [ITEM 1B. UNRESOLVED STAFF COMMENTS](#ITEM1BUNRESOLVEDSTAFFCOMMENTS_709342) | [removed: 17] | [added: 20 |]

| ​ | [ITEM 2. PROPERTIES](#ITEM2PROPERTIES_848852) | [removed: 18] | [added: 20 |]

| ​ | [ITEM 3. LEGAL PROCEEDINGS](#ITEM3LEGALPROCEEDINGS_83582) | [removed: 18] | [added: 21 |]

| ​ | [ITEM 4. MINE SAFETY DISCLOSURES](#ITEM4MINESAFETYDISCLOSURES_135281) | [removed: 19] | [added: 21 |]

| ​ | [INFORMATION ABOUT OUR EXECUTIVE OFFICERS](#EXECUTIVEOFFICERSOFTHEREGISTRANT_442806) | [removed: 19] | [added: 21 |]

| [PART II](#PARTII_636053) | ​ | [added: |] ​ |

| ​ | [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](#ITEM5MARKETFORREGISTRANTSCOMMONEQUITY_76) | [removed: 22] | [added: 24 |]

| ​ | [ITEM 6. SELECTED FINANCIAL DATA](#ITEM6SELECTEDFINANCIALDATA_356509) | [removed: 22] | [added: 24 |]

| ​ | [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#ITEM7MANAGEMENTSDISCUSSIONANDANALYSIS_58) | [removed: 25] | [added: 27 |]

| ​ | [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#ITEM7AQUANTITATIVEANDQUALITATIVEDISCLOSU) | [removed: 39] | [added: 41 |]

| ​ | [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](#ITEM8FINANCIALSTATEMENTSANDSUPPLEMENTARY) | [removed: 40] | [added: 42 |]

| [added: | |] [Report of Independent Registered Public Accounting Firm](#ReportofIndependentRegisteredPublicAccou) | [removed: | 40] [added: 42] |

| [removed: [DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS](#BALANCESHEETS_88009)] | | [removed: 43] [added: [Consolidated Balance Sheets](#BALANCESHEETS_88009)] | [added: 44 |]

| [removed: [DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME](#STATEMENTSOFINCOME_317344)] | | [removed: 44] [added: [Consolidated Statements of Income](#STATEMENTSOFINCOME_317344)] | [added: 45 |]

| [removed: [DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME](#COMPREHENSIVEINCOME_803563)] | | [removed: 45] [added: [Consolidated Statements of Comprehensive Income](#COMPREHENSIVEINCOME_803563)] | [added: 46 |]

| [removed: [DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY](#SHAREHOLDERSEQUITY_636150)] | | [removed: 46] [added: [Consolidated Statements of Shareholders' Equity](#SHAREHOLDERSEQUITY_636150)] | [added: 47 |]

| [removed: [DOLLAR GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS](#CASHFLOWS_532721)] | | [removed: 47] [added: [Consolidated Statements of Cash Flows](#CASHFLOWS_532721)] | [added: 48 |]

| [removed: [DOLLAR GENERAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS](#NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS_6)] | | [removed: 48] [added: [Notes to Consolidated Financial Statements](#NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS_6)] | [added: 49 |]

| ​ | [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE](#ITEM9CHANGESINANDDISAGREEMENTSWITHACCOUN) | [removed: 69] | [added: 68 |]

| ​ | [ITEM 9A. CONTROLS AND PROCEDURES](#ITEM9ACONTROLSANDPROCEDURES_424309) | [removed: 69] | [added: 68 |]

| [added: | |] [Report of Independent Registered Public Accounting Firm](#ReportofIndependent1_574395) | [removed: | 70] [added: 69] |

| ​ | [ITEM 9B. OTHER INFORMATION](#ITEM9BOTHERINFORMATION_957047) | [removed: 71] | [added: 70 |]

| [PART III](#PARTIII_671578) | ​ | [added: |] ​ |

| ​ | [ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE](#ITEM10DIRECTORSEXECUTIVEOFFICERSANDCORPO) | [removed: 74] | [added: 71 |]

| ​ | [ITEM 11. EXECUTIVE COMPENSATION](#ITEM11EXECUTIVECOMPENSATION_872380) | [removed: 74] | [added: 71 |]

| ​ | [ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS](#ITEM12SECURITYOWNERSHIPOFCERTAINBENEFICI) | [removed: 75] | [added: 72 |]

| ​ | [ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE](#ITEM13CERTAINRELATIONSHIPSANDRELATEDTRAN) | [removed: 75] | [added: 72 |]

| ​ | [ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES](#ITEM14PRINCIPALACCOUNTINGFEESANDSERVICES) | [removed: 75] | [added: 72 |]

| [PART IV](#PARTIV_646382) | ​ | [added: |] ​ |

| ​ | [ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES](#ITEM15EXHIBITSANDFINANCIALSTATEMENTSCHED) | [removed: 76] | [added: 73 |]

| ​ | [ITEM [removed: 16] [added: 16.] FORM 10-K SUMMARY](#ITEM16) | [removed: 82] | [added: 79 |]

| [SIGNATURES](#SIGNATURES_950127) | | [removed: 83] | [added: 80 |]

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared or issued its audit report.

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As of February [removed: 28, 2020,] [added: 26, 2021,] we operated [removed: 16,368] [added: 17,266] retail stores located in [removed: 45] [added: 46] states as follows:

| Alabama | | [removed: 796] [added: 829] | | Nevada | | [removed: 22] [added: 21] | ​ |

| Arizona | | [removed: 121] [added: 125] | | New Hampshire | | [removed: 40] [added: 42] | ​ |

| Arkansas | | [removed: 452] [added: 474] | | New Jersey | | [removed: 148] [added: 165] | ​ |

| California | | [removed: 226] [added: 238] | | New Mexico | | [removed: 99] [added: 100] | ​ |

| Colorado | | [removed: 51] [added: 62] | | New York | | [removed: 495] [added: 524] | ​ |

| Connecticut | | [removed: 64] [added: 71] | | North Carolina | | [removed: 870] [added: 916] | ​ |

| Delaware | | [removed: 47] [added: 49] | | North Dakota | | [removed: 42] [added: 51] | ​ |

| Illinois | | [removed: 578] [added: 610] | | Oregon | | [removed: 57] [added: 65] | ​ |

| Iowa | | [removed: 264] [added: 290] | | Rhode Island | | [removed: 20] [added: 21] | ​ |

| Kansas | | [removed: 247] [added: 253] | | South Carolina | | [removed: 564] [added: 584] | ​ |

| Kentucky | | [removed: 565] [added: 616] | | South Dakota | | [removed: 55] [added: 63] | ​ |

| Maine | | [removed: 58] [added: 61] | | Texas | | [removed: 1,552] [added: 1,626] | ​ |

| Maryland | | [removed: 140] [added: 147] | | Utah | | 11 | ​ |

| Massachusetts | | [removed: 50] [added: 53] | | Vermont | | [removed: 37] [added: 38] | ​ |

We also leased approximately 1.1 million square feet of [added: additional] warehouse space in support of our distribution network for non-refrigerated merchandise.

| Florida | | 940 | | Ohio | | 903 | ​ |

| Georgia | | 963 | | Oklahoma | | 480 | ​ |

| Indiana | | 607 | | Pennsylvania | | 826 | ​ |

| Louisiana | | 594 | | Tennessee | | 856 | ​ |

| Michigan | | 612 | | Virginia | | 445 | ​ |

| Minnesota | | 179 | | Washington | | 10 | ​ |

| Mississippi | | 563 | | West Virginia | | 257 | ​ |

| Missouri | | 573 | ​ | Wisconsin | ​ | 216 | ​ |

| Nebraska | | 132 | ​ | Wyoming | ​ | 5 | ​ |

As of February 26, 2021, we operated 17 distribution centers for non-refrigerated products, nine cold storage distribution centers, and one combination distribution center which has both refrigerated and non-refrigerated products.

We lease 12 of these facilities and the remainder are owned.

We have a total of 17.5 million square feet of non-refrigerated space and a total of 2.3 million square feet of cold storage space.

We are currently in the process of constructing one cold storage distribution center and one combination distribution center and are adding cold storage to one of our existing non-refrigerated distribution centers, all of which are expected to be operational in either 2021 or 2022.

| Florida | | 900 | | Ohio | | 858 | ​ |

| Georgia | | 915 | | Oklahoma | | 461 | ​ |

| Indiana | | 566 | | Pennsylvania | | 781 | ​ |

| Louisiana | | 574 | | Tennessee | | 815 | ​ |

| Michigan | | 574 | | Virginia | | 435 | ​ |

| Minnesota | | 163 | | West Virginia | | 249 | ​ |

| Mississippi | | 538 | | Wisconsin | | 192 | ​ |

| Missouri | | 547 | ​ | Wyoming | ​ | 1 | ​ |

| Nebraska | | 128 | ​ | ​ | ​ | ​ | ​ |

As of February 28, 2020, we operated 17 distribution centers for non-refrigerated merchandise with approximately 16.9 million square feet, four of which are leased and the remainder of which are owned.

In addition, we operated five cold storage distribution centers with approximately 1.1 million square feet, four of which are leased and one of which is owned, and we have executed leases for two additional cold storage distribution centers with approximately 0.7 million square feet, which are expected to be operational later in 2020.

Information regarding our current executive officers as of March 19, [removed: 2020] [added: 2021] is set forth below.

| Todd J. Vasos | ​ | [removed: 58] [added: 59] | ​ | Chief Executive Officer and Director |

| John W. Garratt | ​ | [removed: 51] [added: 52] | ​ | Executive Vice President and Chief Financial Officer |

| Jeffery C. Owen | ​ | [removed: 50] [added: 51] | ​ | Chief Operating Officer |

| Michael J. Kindy | ​ | [removed: 54] [added: 55] | ​ | Executive Vice President, Global Supply Chain |

| [removed: Jason S. Reiser] [added: Emily C. Taylor] | ​ | [removed: 51] [added: 45] | ​ | Executive Vice President and Chief Merchandising Officer |

| Steven G. Sunderland | ​ | [removed: 56] [added: 57] | ​ | Executive Vice President, Store Operations |

| Rhonda M. Taylor | ​ | [removed: 52] [added: 53] | ​ | Executive Vice President and General Counsel |

| Carman R. Wenkoff | ​ | [removed: 52] [added: 53] | ​ | Executive Vice President and Chief Information Officer |

| Anita C. Elliott | ​ | [removed: 55] [added: 56] | ​ | Senior Vice President and Chief Accounting Officer |

| Kathleen A. Reardon | ​ | [removed: 48] [added: 49] | ​ | [removed: Senior] [added: Executive] Vice President and Chief People Officer |

Mr. Owen has served as Chief Operating Officer since August [removed: 27,] 2019.

Prior to November 2006, he was Senior Director, [removed: Operations Process Improvement.]

Mr. Owen also served the Company in various operations [added: roles of increasing importance and responsibility from December 1992 to September 2004.]

[removed: Mr. Reiser] [added: Ms. E. Taylor] has served as Executive Vice President and Chief Merchandising Officer since [removed: July 2017.][added: September 25, 2020.]

Ms. [added: R.] Taylor has served as Executive Vice President and General Counsel since March 2015.

She has also held attorney positions with Ford & Harrison [removed: LLP and Stokes Bartholomew.][added: LLP.]

He also previously served as Chairman of the Board and Co-President of Retail Gift Card Association (February 2008 to May 2012); Deputy Chief Information Officer for Independent Purchase Cooperative, Inc. (May 2005 to May 2012) and President of its subsidiary, Value Pay [removed: Services LLC (May 2005 to February 2011); founder and President of Stored Value Management, Inc. (January 2004 to May 2005); and Vice President, Operations and Finance, and General Counsel]

Ms. Reardon has served as [removed: Senior] [added: Executive] Vice President and Chief People Officer since [removed: May 2019.][added: August 25, 2020.]

She became Vice President, Retail Human Resources in October 2014 and was promoted to Senior Vice President, Human Resources in March [added: 2019 and to Senior Vice President and Chief People Officer in May] 2019.

Mr. Vasos has served as a director of KeyCorp since July 2020.

Operations Process Improvement.

As previously announced, Mr. Kindy plans to retire from Dollar General effective April 15, 2021.

She joined Dollar General in 1998 and held roles of increasing responsibility in investor relations, financial planning and analysis, merchandise planning, pricing and merchandising operations prior to her promotion to Vice President, Pricing & Merchandise Data Optimization in March 2011.

She served as Vice President, Merchandising Operations (March 2012 to April 2014) and was subsequently promoted to Senior Vice President, General Merchandise Manager in April 2014.

She most recently served as Senior Vice President, Channel Innovation (September 2019 to September 2020).

Services LLC (May 2005 to February 2011); founder and President of Stored Value Management, Inc. (January 2004 to May 2005); and Vice President, Operations and Finance, and General Counsel of Ontain Corporation (January 2000 to December 2004).

roles of increasing importance and responsibility from December 1992 to September 2004.

He previously served as Executive Vice President and Chief Operating Officer of Vitamin Shoppe, Inc., a multi-channel specialty retailer and contract manufacturer of health and wellness products, from July 2016 to July 2017, where he led merchandising, operations, end-to-end supply chain, information technology, real estate and construction, planning, pricing and merchandising operations.

He also previously served as Executive Vice President, Chief Merchandising Officer (January 2014 to June 2016) and as Senior Vice President, Hardlines Merchandising (July 2013 to January 2014) for discount retailer Dollar Tree, Inc. (successor to Family Dollar Stores, Inc.) and was employed by Walmart Stores, Inc. for 17 years in a variety of roles, including Vice President, Merchandising, Health & Family Care of Sam’s Club (November 2010 to June 2013); Vice President, Operations & Compliance, Health & Wellness of Sam’s Club (May 2010 to November 2010); Divisional Merchandise Manager, Wellness (May 2009 to May 2010); Senior Buyer Pharmacy/OTC of Sam’s Club (November 2006 to May 2009); Director, Government Relations and Regulatory Affairs (August 2002 to November 2006); Pharmacy District Manager (August 2000 to August 2002); and Pharmacy Manager (October 1995 to August 2000).

of Ontain Corporation (January 2000 to December 2004).

Our common stock is traded on the New York Stock Exchange under the symbol “DG.” On March 12, [removed: 2020,] [added: 2021,] there were approximately [removed: 2,613] [added: 2,757] shareholders of record of our common stock.

Our Board of Directors most recently increased the amount of the quarterly cash dividend [removed: to] [added: from] $0.36 [added: to $0.42] beginning with the dividend payable on April [removed: 21, 2020.][added: 20, 2021.]

The following table contains information regarding purchases of our common stock made during the quarter ended January [removed: 31, 2020] [added: 29, 2021] by or on behalf of Dollar General or any “affiliated purchaser,” as defined by Rule 10b-18(a)(3) of the Securities Exchange Act of 1934:

| (a) | On September 5, 2012, the Company announced a program permitting the Company to repurchase a portion of its outstanding shares not to exceed a dollar maximum established by the Company’s Board of Directors. The program was most recently amended on [removed: December 3, 2019] [added: March 17, 2021] to increase the repurchase authorization by [removed: $1.0] [added: $2.0] billion, bringing the cumulative total value of authorized share repurchases under the program since its inception to [removed: $8.0 billion.] [added: $12.0 billion ($2.38 billion of which was available for repurchase as of March 17, 2021 following the increase in the authorization).] Under the authorization, [removed: purchases] [added: repurchases] may be made [added: from time to time] in [removed: the] open market [added: transactions, including pursuant to trading plans adopted in accordance with Rule 10b5-1 of the Exchange Act,] or in privately negotiated [removed: transactions from time to time subject to] [added: transactions. The timing, manner and number of shares repurchased will depend on a variety of factors, including price,] market [added: conditions, compliance with the covenants] and [added: restrictions under the Company’s debt agreements and] other [removed: conditions.] [added: factors.] This repurchase authorization has no expiration date. |

| 10/31/20-11/30/20 | | — | ​ | $ | — | | — | ​ | $ | 1,579,203,000 | ​ |

| 12/01/20-12/31/20 | | 2,527,911 | ​ | $ | 210.44 | | 2,527,911 | ​ | $ | 1,047,218,000 | ​ |

| 01/01/21-01/29/21 | | 1,725,845 | ​ | $ | 213.17 | | 1,725,845 | ​ | $ | 679,314,000 | ​ |

| Total | | 4,253,756 | ​ | $ | 211.55 | | 4,253,756 | ​ | $ | 679,314,000 | ​ |

| 11/02/19-11/30/19 | | — | ​ | $ | — | | — | ​ | $ | 560,822,000 | ​ |

| 12/01/19-12/31/19 | | 1,940,912 | ​ | $ | 154.87 | | 1,940,912 | ​ | $ | 1,260,241,000 | ​ |

| 01/01/20-01/31/20 | | 745,100 | ​ | $ | 153.66 | | 745,100 | ​ | $ | 1,145,749,000 | ​ |

| Total | | 2,686,012 | ​ | $ | 154.53 | | 2,686,012 | ​ | $ | 1,145,749,000 | ​ |

The selected historical statement of income data and statement of cash flows data for the fiscal years ended January [added: 29, 2021, January] 31, 2020, [added: and] February 1, 2019, and [removed: February 2, 2018, and] balance sheet data as of January [removed: 31, 2020] [added: 29, 2021] and [removed: February 1, 2019,] [added: January 31, 2020,] have been derived from our historical audited consolidated financial statements included elsewhere in this report.

[removed: The selected historical statement of income] data [removed: and statement of cash flows data for the fiscal years ended February 3, 2017 and January 29, 2016 and balance sheet data] as of February [added: 1, 2019, February] 2, 2018, [added: and] February 3, [removed: 2017, and January 29, 2016] [added: 2017] presented in this table have been derived from audited consolidated financial statements not included in this report.

| number of stores, selling square feet, and net sales | ​ | January [added: 29, | | ​ | January] 31, | | ​ | February 1, | | ​ | February 2, | | ​ | February 3, | | [removed: ​] | [removed: January 29, | | |]

| per square foot) | ​ | [removed: 2020] [added: 2021] | | ​ | [removed: 2019] [added: 2020] | | ​ | [removed: 2018] [added: 2019] | | ​ | [removed: 2017(1)] [added: 2018] | | ​ | [removed: 2016] [added: 2017(1)] | | |

| Net sales | ​ | $ | [removed: 27,754.0] [added: 33,746.8] | ​ | $ | [removed: 25,625.0] [added: 27,754.0] | ​ | $ | [removed: 23,471.0] [added: 25,625.0] | ​ | $ | [removed: 21,986.6] [added: 23,471.0] | ​ | $ | [removed: 20,368.6] [added: 21,986.6] | ​ |

| Cost of goods sold | ​ | | [removed: 19,264.9] [added: 23,028.0] | ​ | | [removed: 17,821.2] [added: 19,264.9] | ​ | | [removed: 16,249.6] [added: 17,821.2] | ​ | | [removed: 15,204.0] [added: 16,249.6] | ​ | | [removed: 14,062.5] [added: 15,204.0] | ​ |

| Gross profit | ​ | | [removed: 8,489.1] [added: 10,718.9] | ​ | | [removed: 7,803.9] [added: 8,489.1] | ​ | | [removed: 7,221.4] [added: 7,803.9] | ​ | | [removed: 6,782.6] [added: 7,221.4] | ​ | | [removed: 6,306.1] [added: 6,782.6] | ​ |

| Selling, general and administrative expenses | ​ | | [removed: 6,186.8] [added: 7,164.1] | ​ | | [removed: 5,687.6] [added: 6,186.8] | ​ | | [removed: 5,213.5] [added: 5,687.6] | ​ | | [removed: 4,719.2] [added: 5,213.5] | ​ | | [removed: 4,365.8] [added: 4,719.2] | ​ |

| Operating profit | ​ | | [removed: 2,302.3] [added: 3,554.8] | ​ | | [removed: 2,116.3] [added: 2,302.3] | ​ | | [removed: 2,007.8] [added: 2,116.3] | ​ | | [removed: 2,063.4] [added: 2,007.8] | ​ | | [removed: 1,940.3] [added: 2,063.4] | ​ |

| Interest expense | ​ | | [removed: 100.6] [added: 150.4] | ​ | | [removed: 99.9] [added: 100.6] | ​ | | [removed: 97.0] [added: 99.9] | ​ | | [removed: 97.8] [added: 97.0] | ​ | | [removed: 86.9] [added: 97.8] | ​ |

| Other (income) expense | ​ | | — | ​ | | [removed: 1.0] [added: —] | ​ | | [removed: 3.5] [added: 1.0] | ​ | | [removed: —] [added: 3.5] | ​ | | [removed: 0.3] [added: —] | ​ |

| Income before income taxes | ​ | | [removed: 2,201.7] [added: 3,404.4] | ​ | | [removed: 2,015.4] [added: 2,201.7] | ​ | | [removed: 1,907.3] [added: 2,015.4] | ​ | | [removed: 1,965.6] [added: 1,907.3] | ​ | | [removed: 1,853.0] [added: 1,965.6] | ​ |

| Income tax expense | ​ | | [removed: 489.2] [added: 749.3] | ​ | | [removed: 425.9] [added: 489.2] | ​ | | [removed: 368.3] [added: 425.9] | ​ | | [removed: 714.5] [added: 368.3] | ​ | | [removed: 687.9] [added: 714.5] | ​ |

| Net income | ​ | $ | [removed: 1,712.6] [added: 2,655.1] | ​ | $ | [removed: 1,589.5] [added: 1,712.6] | ​ | $ | [removed: 1,539.0] [added: 1,589.5] | ​ | $ | [removed: 1,251.1] [added: 1,539.0] | ​ | $ | [removed: 1,165.1] [added: 1,251.1] | ​ |

| Earnings per share—basic | ​ | $ | [removed: 6.68] [added: 10.70] | ​ | $ | [removed: 5.99] [added: 6.68] | ​ | $ | [removed: 5.64] [added: 5.99] | ​ | $ | [removed: 4.45] [added: 5.64] | ​ | $ | [removed: 3.96] [added: 4.45] | ​ |

| Earnings per share—diluted | ​ | | [removed: 6.64] [added: 10.62] | ​ | | [removed: 5.97] [added: 6.64] | ​ | | [removed: 5.63] [added: 5.97] | ​ | | [removed: 4.43] [added: 5.63] | ​ | | [removed: 3.95] [added: 4.43] | ​ |

| Dividends per share | ​ | | [removed: 1.28] [added: 1.44] | ​ | | [removed: 1.16] [added: 1.28] | ​ | | [removed: 1.04] [added: 1.16] | ​ | | [removed: 1.00] [added: 1.04] | ​ | | [removed: 0.88] [added: 1.00] | ​ |

| Operating activities | ​ | $ | [removed: 2,238.0] [added: 3,876.2] | ​ | $ | [removed: 2,143.6] [added: 2,238.0] | ​ | $ | [removed: 1,802.1] [added: 2,143.6] | ​ | $ | [removed: 1,605.0] [added: 1,802.1] | ​ | $ | [removed: 1,391.7] [added: 1,605.0] | ​ |

| Investing activities | ​ | | [removed: (782.5)] [added: (1,024.9)] | ​ | | [removed: (731.6)] [added: (782.5)] | ​ | | [removed: (645.0)] [added: (731.6)] | ​ | | [removed: (550.9)] [added: (645.0)] | ​ | | [removed: (503.4)] [added: (550.9)] | ​ |

| Financing activities | ​ | | [removed: (1,450.7)] [added: (1,715.0)] | ​ | | [removed: (1,443.9)] [added: (1,450.7)] | ​ | | [removed: (1,077.6)] [added: (1,443.9)] | ​ | | [removed: (1,024.1)] [added: (1,077.6)] | ​ | | [removed: (1,310.2)] [added: (1,024.1)] | ​ |

| Total capital expenditures | ​ | | [removed: (784.8)] [added: (1,028.0)] | ​ | | [removed: (734.4)] [added: (784.8)] | ​ | | [removed: (646.5)] [added: (734.4)] | ​ | | [removed: (560.3)] [added: (646.5)] | ​ | | [removed: (504.8)] [added: (560.3)] | ​ |

| Same store sales growth(2) | ​ | | [removed: 3.9] [added: 16.3] | % | | [removed: 3.2] [added: 3.9] | % | | [removed: 2.7] [added: 3.2] | % | | [removed: 0.9] [added: 2.7] | % | | [removed: 2.8] [added: 0.9] | % |

| Same store sales(2) | ​ | $ | [removed: 26,374.0] [added: 31,905.3] | ​ | $ | [removed: 23,854.0] [added: 26,374.0] | ​ | $ | [removed: 21,871.6] [added: 23,854.0] | ​ | $ | [removed: 20,348.1] [added: 21,871.6] | ​ | $ | [removed: 19,254.3] [added: 20,348.1] | ​ |

| Number of stores included in same store sales calculation | ​ | | [removed: 15,209] [added: 16,050] | ​ | | [removed: 14,283] [added: 15,209] | ​ | | [removed: 13,150] [added: 14,283] | ​ | | [removed: 12,383] [added: 13,150] | ​ | | [removed: 11,706] [added: 12,383] | ​ |

| Number of stores (at period end) | ​ | | [removed: 16,278] [added: 17,177] | ​ | | [removed: 15,370] [added: 16,278] | ​ | | [removed: 14,534] [added: 15,370] | ​ | | [removed: 13,320] [added: 14,534] | ​ | | [removed: 12,483] [added: 13,320] | ​ |

| Selling square feet (in thousands at period end) | ​ | | [removed: 120,342] [added: 127,056] | ​ | | [removed: 113,755] [added: 120,342] | ​ | | [removed: 107,821] [added: 113,755] | ​ | | [removed: 98,943] [added: 107,821] | ​ | | [removed: 92,477] [added: 98,943] | ​ |

| Net sales per square foot(3) | ​ | $ | [removed: 237] [added: 273] | ​ | $ | [removed: 231] [added: 237] | ​ | $ | [removed: 227] [added: 231] | ​ | $ | [removed: 229] [added: 227] | ​ | $ | [removed: 226] [added: 229] | ​ |

| Consumables sales | ​ | | [removed: 78.0] [added: 76.8] | % | | [removed: 77.5] [added: 78.0] | % | | [removed: 76.9] [added: 77.5] | % | | [removed: 76.4] [added: 76.9] | % | | [removed: 75.9] [added: 76.4] | % |

| Seasonal sales | ​ | | [removed: 11.7] [added: 12.1] | % | | [removed: 11.9] [added: 11.7] | % | | [removed: 12.1] [added: 11.9] | % | | [removed: 12.2] [added: 12.1] | % | | [removed: 12.4] [added: 12.2] | % |

| Home products sales | ​ | | [removed: 5.8] [added: 6.5] | % | | [removed: 5.9] [added: 5.8] | % | | [removed: 6.0] [added: 5.9] | % | | [removed: 6.2] [added: 6.0] | % | | [removed: 6.3] [added: 6.2] | % |

| Apparel sales | ​ | | [removed: 4.5] [added: 4.6] | % | | [removed: 4.7] [added: 4.5] | % | | [removed: 5.0] [added: 4.7] | % | | [removed: 5.2] [added: 5.0] | % | | [removed: 5.4] [added: 5.2] | % |

| Cash and cash equivalents and short-term investments | ​ | $ | [removed: 240.3] [added: 1,376.6] | ​ | $ | [removed: 235.5] [added: 240.3] | ​ | $ | [removed: 267.4] [added: 235.5] | ​ | $ | [removed: 187.9] [added: 267.4] | ​ | $ | [removed: 157.9] [added: 187.9] | ​ |

| Total [removed: assets] [added: assets(4)] | ​ | | [removed: 22,825.1] [added: 25,862.6] | ​ | | [removed: 13,204.0] [added: 22,825.1] | ​ | | [removed: 12,516.9] [added: 13,204.0] | ​ | | [removed: 11,672.3] [added: 12,516.9] | ​ | | [removed: 11,257.9] [added: 11,672.3] | ​ |

| Long-term [removed: debt(4)] [added: debt] | ​ | | [removed: 2,912.0] [added: 4,131.0] | ​ | | [removed: 2,864.7] [added: 2,912.0] | ​ | | [removed: 3,006.0] [added: 2,864.7] | ​ | | [removed: 3,211.5] [added: 3,006.0] | ​ | | [removed: 2,970.6] [added: 3,211.5] | ​ |

| Total shareholders’ equity | ​ | | [removed: 6,702.5] [added: 6,661.2] | ​ | | [removed: 6,417.4] [added: 6,702.5] | ​ | | [removed: 6,125.8] [added: 6,417.4] | ​ | | [removed: 5,406.3] [added: 6,125.8] | ​ | | [removed: 5,377.9] [added: 5,406.3] | ​ |

The selected historical statement of income data and statement of cash flows data for the fiscal years ended February 2, 2018 and February 3, 2017 and balance sheet

| (4) | The increase in total assets at January 31, 2020 reflects the effects of adoption of lease accounting guidance. |

| (4) | Debt issuance costs are reflected as a deduction from the corresponding debt liability for all periods presented. |

We have audited the accompanying consolidated balance sheets of Dollar General Corporation and subsidiaries (the Company) as of January [removed: 31, 2020] [added: 29, 2021] and [removed: February 1, 2019,] [added: January 31, 2020,] the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended January [removed: 31, 2020,] [added: 29, 2021,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January [removed: 31, 2020] [added: 29, 2021] and [removed: February 1, 2019,] [added: January 31, 2020,] and the results of its operations and its cash flows for each of the three years in the period ended January [removed: 31, 2020,] [added: 29, 2021,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January [removed: 31, 2020,] [added: 29, 2021,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 19, [removed: 2020,] [added: 2021,] expressed an unqualified opinion thereon.

Critical Audit [removed: Matters][added: Matter]

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current period audit of the financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that: (1) [removed: relate] [added: relates] to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, [removed: subjective,] [added: subjective] or complex judgments.

The communication of [added: the] critical audit [removed: matters] [added: matter] does not alter in any way our [added: opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical]

| _Description of the Matter_ | The Company records expenses and reserves for workers’ compensation matters related to alleged work-related employee accidents and injuries, as well as general liability matters related to alleged non-employee incidents and injuries. At January [removed: 31, 2020,] [added: 29, 2021,] the Company’s reserves for self-insurance risks were [removed: $240.6] [added: $245.1] million, which includes workers’ compensation and general liability reserves. As discussed in Note 1 of the consolidated financial statements, the Company retains a significant portion of risk related to its workers’ compensation and general liability exposures. Accordingly, provisions are recorded for the Company’s estimates of such losses. The undiscounted future claim costs for the workers’ compensation and general liability exposures are estimated using actuarial methods. ​ Auditing management’s assessment of the recorded self-insurance exposure reserves was complex and judgmental due to the significant assumptions required in projecting the exposure on incurred claims (including those which have not been reported to the Company). In particular, the estimate was sensitive to significant assumptions such as loss development factors, trend factors, pure loss rates, and projected claim counts. | |

[removed: March 19, 2020][added: | ​ | ​ | 2020 | | | | | | | ​ |]

| ​ | | January [added: 29, | | | January] 31, | | | February 1, | | |

| ​ | [added: ​ | 2021 | |] ​ | 2020 | | ​ | 2019 | | |

| Cash and cash [removed: equivalents] [added: equivalents, beginning of period] | ​ | [removed: $] | 240,320 | ​ | [removed: $] | 235,487 | ​ | [added: | 267,441 | ​ |]

| Merchandise inventories | ​ | | [removed: 4,676,848] [added: 5,247,477] | ​ | | [removed: 4,097,004] [added: 4,676,848] | ​ |

| Income taxes receivable | ​ | ​ | [removed: 76,537] [added: 90,760] | ​ | ​ | [removed: 57,804] [added: 76,537] | ​ |

| Prepaid expenses and other current assets | ​ | | [removed: 184,163] [added: 199,405] | ​ | | [removed: 272,725] [added: 184,163] | ​ |

| Total current assets | ​ | | [removed: 5,177,868] [added: 6,914,219] | ​ | | [removed: 4,663,020] [added: 5,177,868] | ​ |

| Net property and equipment | ​ | | [removed: 3,278,359] [added: 3,899,997] | ​ | | [removed: 2,970,806] [added: 3,278,359] | ​ |

| Operating lease assets | ​ | ​ | [removed: 8,796,183] [added: 9,473,330] | ​ | ​ | [removed: —] [added: 8,796,183] | ​ |

| Other intangible assets, net | ​ | | [removed: 1,200,006] [added: 1,199,870] | ​ | | [removed: 1,200,217] [added: 1,200,006] | ​ |

| Other assets, net | ​ | | [removed: 34,079] [added: 36,619] | ​ | | [removed: 31,406] [added: 34,079] | ​ |

| Total assets | ​ | $ | [removed: 22,825,084] [added: 25,862,624] | ​ | $ | [removed: 13,204,038] [added: 22,825,084] | ​ |

| Current portion of operating lease liabilities | ​ | [removed: ​] [added: $] | [removed: 964,805] [added: 1,074,079] | ​ | [removed: ​] [added: $] | [removed: —] [added: 964,805] | ​ |

| Accounts payable | ​ | | [removed: 2,860,682] [added: 3,614,089] | ​ | | [removed: 2,385,469] [added: 2,860,682] | ​ |

| Accrued expenses and other | ​ | | [removed: 709,156] [added: 1,006,552] | ​ | | [removed: 618,405] [added: 709,156] | ​ |

| Income taxes payable | ​ | | [removed: 8,362] [added: 16,063] | ​ | | [removed: 10,033] [added: 8,362] | ​ |

| Total current liabilities | ​ | | [removed: 4,543,560] [added: 5,710,783] | ​ | | [removed: 3,015,857] [added: 4,543,005] | ​ |

| Long-term obligations | ​ | | [removed: 2,911,438] [added: 4,130,975] | ​ | | [removed: 2,862,740] [added: 2,911,993] | ​ |

| Long-term operating lease liabilities | ​ | ​ | [removed: 7,819,683] [added: 8,385,388] | ​ | ​ | [removed: —] [added: 7,819,683] | ​ |

| Deferred income taxes | ​ | | [removed: 675,227] [added: 710,549] | ​ | | [removed: 609,687] [added: 675,227] | ​ |

| Other liabilities | ​ | | [removed: 172,676] [added: 263,691] | ​ | | [removed: 298,361] [added: 172,676] | ​ |

| Common stock; $0.875 par value, 1,000,000 shares authorized, [removed: 251,936] [added: 240,785] and [removed: 259,511] [added: 251,936] shares issued and outstanding at January [removed: 31, 2020] [added: 29, 2021] and [removed: February 1, 2019,] [added: January 31, 2020,] respectively | ​ | | [removed: 220,444] [added: 210,687] | ​ | | [removed: 227,072] [added: 220,444] | ​ |

| Additional paid-in capital | ​ | | [removed: 3,322,531] [added: 3,446,612] | ​ | | [removed: 3,252,421] [added: 3,322,531] | ​ |

| Retained earnings | ​ | | [removed: 3,162,660] [added: 3,006,102] | ​ | | [removed: 2,941,107] [added: 3,162,660] | ​ |

| Accumulated other comprehensive loss | ​ | | [removed: (3,135)] [added: (2,163)] | ​ | | [removed: (3,207)] [added: (3,135)] | ​ |

| Total shareholders’ equity | ​ | | [removed: 6,702,500] [added: 6,661,238] | ​ | | [removed: 6,417,393] [added: 6,702,500] | ​ |

| Total liabilities and shareholders' equity | ​ | $ | [removed: 22,825,084] [added: 25,862,624] | ​ | $ | [removed: 13,204,038] [added: 22,825,084] | ​ |

| ​ | [added: ​] | January [removed: 31,] [added: 29,] | | | [removed: February 1,] [added: January 31,] | | | February [removed: 2,] [added: 1,] | | |

| [removed: ​] [added: (In thousands)] | [removed: ​] | 2020 | | [removed: ​] | 2019 | | [removed: ​] | 2018 | | |

| Net sales | ​ | $ | [removed: 27,753,973] [added: 33,746,839] | ​ | $ | [removed: 25,625,043] [added: 27,753,973] | ​ | $ | [removed: 23,470,967] [added: 25,625,043] | ​ |

| Cost of goods sold | ​ | | [removed: 19,264,912] [added: 23,027,977] | ​ | | [removed: 17,821,173] [added: 19,264,912] | ​ | | [removed: 16,249,608] [added: 17,821,173] | ​ |

| Gross profit | ​ | | [removed: 8,489,061] [added: 10,718,862] | ​ | | [removed: 7,803,870] [added: 8,489,061] | ​ | | [removed: 7,221,359] [added: 7,803,870] | ​ |

audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosure to which it relates.

March 19, 2021

| ​ | ​ | 2021 | | ​ | 2020 | | |

| Cash and cash equivalents | ​ | $ | 1,376,577 | ​ | $ | 240,320 | ​ |

| Net income | ​ | $ | 2,655,050 | ​ | $ | 1,712,555 | ​ | $ | 1,589,472 | ​ |

| Net income | | — | ​ | | — | ​ | | — | ​ | | 2,655,050 | ​ | | — | ​ | | 2,655,050 | ​ |

| Repurchases of common stock | | (12,297) | ​ | | (10,760) | ​ | | — | ​ | | (2,455,674) | ​ | | — | ​ | | (2,466,434) | ​ |

| Balances, January 29, 2021 | | 240,785 | ​ | $ | 210,687 | ​ | $ | 3,446,612 | ​ | $ | 3,006,102 | ​ | $ | (2,163) | ​ | $ | 6,661,238 | ​ |

| ​ | ​ | 2021 | | ​ | 2020 | | ​ | 2019 | | |

| Net income | ​ | $ | 2,655,050 | ​ | $ | 1,712,555 | ​ | $ | 1,589,472 | ​ |

| Borrowings under revolving credit facilities | ​ | | 300,000 | ​ | | — | ​ | | — | ​ |

| Repayments of borrowings under revolving credit facilities | ​ | | (300,000) | ​ | | — | ​ | | — | ​ |

As of January 29, 2021, the Company operated 16 distribution centers for non-refrigerated products, nine cold storage distribution centers, and one combination distribution center which has both refrigerated and non-refrigerated products.

The Company leases 12 of these facilities and the remainder are owned.

| ​ | | ​ | | | | January 29, | | | January 31, | | |

| Right of use assets - finance leases | ​ | Various | | | ​ | ​ | 163,108 | ​ | ​ | — | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | | 7,264,330 | ​ | | 6,097,970 | ​ |

| | | | | | | | | | | | ​ |

| ​ | | | | | | | | | | | ​ |

to variability and difficult to predict.

If the results of such test indicate impairment, the associated assets must be written down to fair value as described in further detail below.

The process consists of comparing the fair value of the reporting unit to its carrying amount, including goodwill.

If the fair value of the reporting unit is less than its carrying amount, management would then determine if the difference between the carrying amount and fair value is greater than the carrying amount of goodwill allocated to the reporting unit.

If it is, the impairment recognized would be equal to the total carrying amount of goodwill allocated to the reporting unit, and if not, impairment would be recognized equal to the difference between the carrying amount of the reporting unit and its fair value.

| ​ | | January 29, | | | January 31, | | |

| ​ | ​ | $ | 1,006,552 | ​ | $ | 709,156 | ​ |

lease as deferred rent.

| ​ | | January 29, | | | January 31, | | |

| (In thousands) | ​ | 2021 | | ​ | 2020 | | |

| Payroll tax liabilities | ​ | ​ | 81,488 | ​ | ​ | — | ​ |

| ​ | ​ | $ | 263,691 | ​ | $ | 172,676 | ​ |

In August 2018, the Financial Accounting Standards Board (“FASB”) issued guidance related to the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract.

These amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, as well as hosting arrangements that include an internal use software license.

This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2019, and early adoption is permitted.

The Company adopted this guidance on a prospective basis and such adoption had an immaterial effect on the Company’s consolidated financial position and results of operations.

Also in August 2018, the FASB issued guidance related to the disclosure requirements for fair value measurement.

This guidance added, modified, and removed certain disclosure requirements related to assets and liabilities recorded at fair value.

The majority of this guidance pertains to assets and liabilities classified in Level 3 of the fair value hierarchy, and the Company has no such assets or liabilities.

This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2019, and early adoption is permitted.

The adoption of this guidance did not affect the Company’s consolidated results of operations, financial position or cash flows.

​

Adoption of New Accounting Standard

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for lease contracts on February 2, 2019, due to the adoption of ASU 2016-02 _Leases_ (ASC 842).

See below for discussion of our related critical audit matter.

opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

| ​ | | |

| --- | --- | --- |

| ​ | ​ | |

| ​ | ​ | |

| ​ ​ ​ | ​ | |

| ​ | Adoption of New Lease Accounting Standard | |

| _Description of the Matter_ | As described above and in Note 1 to the consolidated financial statements, the Company adopted ASU 2016-02, _Leases_ (ASC 842), on February 2, 2019. The adoption of ASC 842 resulted in the recognition of right-of-use operating lease assets and lease liabilities of approximately $8.0 billion as of February 2, 2019. The cumulative effect of adopting the standard resulted in an adjustment to retained earnings of $28.8 million at the same date. Among the elements of management estimation in connection with the adoption was the determination of incremental borrowing rates (“IBR”) which were used to calculate its operating right-of-use assets and lease liabilities. Management estimates certain adjustments to observed borrowing rates in order to derive the IBRs that are representative of the rate the lessee would have to borrow on a collateralized basis over a similar term as the subject lease. ​ Auditing the Company’s adoption of ASC 842 was complex and involved subjective auditor judgement because the Company is party to a significant number of lease contracts, and certain aspects of adopting ASC 842 required management to exercise significant judgment in applying ASC 842 to its portfolio of lease contracts. In particular, auditing management’s estimate of the IBRs used to determine the operating right-of-use assets and lease liabilities was especially challenging and required the evaluation of the significant assumptions utilized by management including the selection of appropriate yield curves and adjustments for collateralization. | |

| _How We Addressed the Matter in Our Audit_ | We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s accounting for the adoption of ASC 842. For example, we tested controls over management’s review of the application of accounting policy elections to its portfolio of leases and over management’s review of the estimation of the IBRs. ​ To test the Company’s adoption of ASC 842, we performed audit procedures that included, among others, evaluating the completeness of the population of contracts that meet the definition of a lease under ASC 842, testing the accuracy of lease terms by agreement of such terms to the original lease contract, and testing the accuracy of the Company’s calculations of initial right-of-use assets and lease liabilities. We involved our specialist to assist in our evaluation of the Company’s methodology, model and significant assumptions utilized in developing the IBRs. We also compared the Company’s IBRs to ranges developed by our specialists based on independently observed data. | |

| --- | --- |

| --- | --- | --- | --- | --- | --- | --- | --- |

| Current portion of long-term obligations | ​ | $ | 555 | ​ | $ | 1,950 | ​ |

| Balances, February 3, 2017 | | 275,212 | ​ | $ | 240,811 | ​ | $ | 3,154,606 | ​ | $ | 2,015,867 | ​ | $ | (4,990) | ​ | $ | 5,406,294 | ​ |

| Net income | | — | ​ | | — | ​ | | — | ​ | | 1,538,960 | ​ | | — | ​ | | 1,538,960 | ​ |

| Repurchases of common stock | | (7,060) | ​ | | (6,178) | ​ | | — | ​ | | (573,534) | ​ | | — | ​ | | (579,712) | ​ |

| Loss on debt retirement | ​ | | — | ​ | | 1,019 | ​ | | 3,502 | ​ |

| Cash and cash equivalents, beginning of period | ​ | | 235,487 | ​ | | 267,441 | ​ | | 187,915 | ​ |

The Company owns 13 and leases four distribution centers for non-refrigerated merchandise.

At January 31, 2020, the Company also operated one owned and four leased cold storage and distribution facilities.

The Company recorded a LIFO provision (benefit) of $7.0

In 2007, the Company’s property and equipment was recorded at estimated fair values as the result of a merger transaction.

| ​ | ​ | ​ | ​ | ​ | ​ | | 6,097,970 | ​ | | 5,518,977 | ​ |

Generally, the Company’s policy is to review

The first step of the process consists of estimating the fair value of an entity’s reporting units based on valuation techniques (including a discounted cash flow model using revenue and profit forecasts) and comparing that estimated fair value with the recorded carrying value, which includes goodwill.

If the estimated fair value is less than the carrying value, a second step is performed to compute the amount of the impairment by determining an “implied fair value” of goodwill.

The determination of the implied fair value of goodwill would require the entity to allocate the estimated fair value of its reporting unit to its assets and liabilities.

Any unallocated fair value would represent the implied fair value of goodwill, which would be compared to its corresponding carrying value.

| ​ | ​ | $ | 709,156 | ​ | $ | 618,405 | ​ |

Factors incorporated into the calculation of lease discount rates include the valuations and yields of the Company’s senior notes, their credit spread over comparable U.S. Treasury rates, and an index of the credit spreads for all North American investment grade companies by rating.

To determine an indicative secured rate, the Company uses the estimated credit spread improvement that would result from an upgrade of one ratings classification by tenor.

on the date that the Company took physical possession of the property from the landlord.

The Company recognizes contingent rental expense when the achievement of specified sales targets is considered probable.

The amount expensed but not paid as of January 31, 2020 and February 1, 2019 was approximately $2.3 million and $2.4 million, respectively, and is included in Accrued expenses and other in the consolidated balance sheets.

Noncurrent Other liabilities consist of the following:

| Deferred rent | ​ | | — | ​ | | 70,139 | ​ |

| Deferred gain on sale leaseback | ​ | | — | ​ | | 40,303 | ​ |

Based on its assessment, management has concluded that our internal control over financial reporting is effective as of January [removed: 31, 2020.][added: 29, 2021.]

We have audited Dollar General Corporation and subsidiaries’ internal control over financial reporting as of January [removed: 31, 2020,] [added: 29, 2021,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Dollar General Corporation and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of January [removed: 31, 2020,] [added: 29, 2021,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the [removed: 2019] [added: 2020] consolidated financial statements of the Company and our report dated March 19, [removed: 2020,] [added: 2021,] expressed an unqualified opinion thereon.

_(d) Changes in Internal Control Over Financial Reporting._ There have been no changes during the quarter ended January [removed: 31, 2020] [added: 29, 2021] in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) or Rule 15d-15(f)) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

March 19, 2021

March 19, 2020

On March [removed: 17, 2020,] [added: 16, 2021,] the [added: Company’s Compensation] Committee [added: (the “Committee”)] approved the Company’s [removed: 2020] [added: 2021] short-term incentive bonus program applicable to the Company’s named executive officers [removed: (“2020] [added: (“2021] Teamshare”) on the terms and subject to the conditions set forth in the [removed: 2020] Teamshare [removed: bonus program] [added: Incentive Program] document attached hereto as Exhibit [removed: 10.31.][added: 10.33.]

The Committee again selected adjusted EBIT as the Company-wide performance measure for [removed: 2020] [added: 2021] Teamshare and established the target level of adjusted EBIT consistent with adjusted EBIT in the Company’s fiscal year [removed: 2020] [added: 2021] financial plan previously approved by the Board of Directors.

The Committee determined that adjusted EBIT shall mean the Company’s [removed: Operating Profit] [added: operating profit] as calculated in accordance with United States generally accepted accounting principles, but shall exclude the impact of (a) any costs, fees and expenses directly related to the consideration, negotiation, preparation, or consummation of any asset sale, merger or other transaction that results in a Change in Control (within the meaning of the Dollar General Corporation Amended and Restated 2007 Stock Incentive Plan) of the Company or any offering of Company common stock or other security; (b) disaster-related charges; (c) any gains or losses associated with the Company’s LIFO computation; and (d) unless the Committee disallows any such item, (i) any unbudgeted loss [added: which individually exceeds $1 million] as a result of the resolution of a legal matter or (ii) any unplanned [removed: loss(es)] [added: loss] or [removed: gain(s)] [added: gain which individually exceeds $1 million] related to the implementation of accounting or tax legislative changes or [added: changes in federal, state or local wage or benefit mandates, or] (iii) any unplanned [removed: loss(es)] [added: loss] or [removed: gain(s)] [added: gain which individually exceeds $1 million] of a non-recurring nature, provided that [removed: in] the [removed: case of each] [added: combined amount] of (i), (ii) and (iii) [removed: such amount] equals or exceeds [removed: $1 million from a single loss] [added: loss(es)] or [removed: gain, as applicable, and] [added: gain(s) of] $10 million in the aggregate.