Dollar General Corporation
PART I
ITEM 1. BUSINESS
General
We are the largest discount retailer in the United States by number of stores, with 20,959 stores located in 48 U.S. states and Mexico as of February 27, 2026, with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States. Our first stores in Mexico opened in 2023. We offer a broad selection of merchandise, including consumable items, seasonal items, home products and apparel. Our merchandise includes national brands from leading manufacturers, as well as our own private brand selections with prices at substantial discounts to national brands. We offer our customers these national brand and private brand products at everyday low prices (typically $10 or less) in our convenient small-box locations.
Our History
J.L. Turner founded our Company in 1939 as J.L. Turner and Son, Wholesale. We were incorporated as a Kentucky corporation under the name J.L. Turner & Son, Inc. in 1955, when we opened our first Dollar General store. We changed our name to Dollar General Corporation in 1968 and reincorporated in 1998 as a Tennessee corporation. Our common stock was publicly traded from 1968 until July 2007, when we merged with an entity controlled by investment funds affiliated with Kohlberg Kravis Roberts & Co. L.P., or KKR. In November 2009 our common stock again became publicly traded on the New York Stock Exchange under the symbol “DG”, and in December 2013 the entity controlled by investment funds affiliated with KKR sold its remaining shares of our common stock.
Our Business Model
Our long history of profitable growth is founded on a commitment to a relatively simple business model: providing a broad base of customers with their basic everyday and household needs, supplemented with a variety of general merchandise items, at everyday low prices in conveniently located, small-box stores. We continually evaluate the needs and demands of our customers and modify our merchandise selections and pricing accordingly, while remaining focused on increasing profitability, cash generation and returns for our shareholders.
Our long-term operating priorities are: 1) driving profitable sales growth, 2) capturing growth opportunities, 3) enhancing our position as a low-cost operator, and 4) investing in the growth and development of our teams. 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.
We have achieved positive same-store sales growth each year since 1990, with the exception of 2021 which followed unusually high sales results in 2020 during the height of the COVID pandemic. We believe that this consistent growth over many years, 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 achieve positive same-store sales growth in any given year.
Compelling Value and Convenience Proposition. Our ability to deliver highly competitive prices in convenient locations and our easy “in and out” shopping format create a compelling shopping experience that we believe distinguishes us from other discount retailers as well as convenience, drug, grocery, online and mass merchant retailers. Our slogan “Save time. Save money. Every 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 limited shopping alternatives, as well as in larger and more competitive markets. Our value and convenience proposition is evidenced by the following attributes of our business model:
| ● | Everyday Low Prices on Quality Merchandise. Our research indicates that we offer a price advantage over most food and drug retailers and that our prices are competitive with even the |
5
| ● | Convenient Locations. Our stores are conveniently located in a variety of rural, suburban and urban communities. We seek to locate our stores in close proximity to our customers, which helps drive customer loyalty and trip frequency and makes us an attractive alternative to large discount and large-box retail and grocery stores. |
| ● | Time-Saving Shopping Experience. We strive to provide customers with a highly convenient, easy to navigate shopping experience. Our small-box stores are designed to make it easier to get in and out quickly, and our digital tools, including our home delivery offerings, help drive even greater convenience and additional access points. Our product offering includes most necessities, such as basic packaged and refrigerated or frozen food products, dairy products, cleaning supplies, paper products, health and beauty care items, greeting cards and other stationery items, housewares, hardware, automotive supplies and basic apparel, 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. |
Substantial Growth Opportunities. We believe we have substantial long-term growth potential in the U.S., and we have identified significant opportunities to add new Dollar General stores in both existing and new markets. In addition, we have opportunities to relocate, remodel or convert locations within our existing store base to better serve our customers. Our attractive store economics, including a relatively low initial investment and simple, low-cost operating approach, 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. In 2020 we launched pOpshelf, our unique small-box retail concept that focuses primarily on non-consumables. Beginning in 2025, we paused new pOpshelf store expansion while we evaluate and evolve its go-forward strategy and performance. We have also identified international expansion, with an initial focus on Mexico, as an opportunity for growth. We opened our first Mi Súper Dollar General stores in Mexico in 2023, in which we have further expanded in each subsequent year, and believe there is additional growth potential in Mexico in the years ahead.
Our Merchandise
We offer a focused assortment of everyday necessities, which we believe helps to drive frequent customer visits, as well as key items in a broad range of general merchandise categories. Our product assortment provides the opportunity for our customers to address most of their basic shopping needs with one trip. We offer a wide selection of nationally advertised brands from leading manufacturers. Additionally, our private brand products offer even greater value with options to purchase both products that are of comparable quality to national brands as well as opening price point items, each often at substantial discounts to the national brands.
Consumables is our largest merchandise category and includes paper and cleaning products (such as paper towels, bath tissue, paper dinnerware, trash and storage bags, disinfectants, and laundry); packaged food (such as cereals, pasta, canned soups, canned meats, fruits and vegetables, condiments, spices, sugar and flour); perishables (such as milk, eggs, bread, refrigerated and frozen food, beer, wine and produce); 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.
Seasonal products include holiday items, toys, batteries, small electronics, greeting cards, stationery, prepaid phones and accessories, gardening supplies, hardware, automotive and home office supplies.
Home products include kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, bed and bath soft goods.
6
Apparel includes basic items for infants, toddlers, girls, boys, women and men, as well as socks, underwear, disposable diapers, shoes and accessories.
The percentage of net sales of each of our four categories of merchandise for the fiscal years indicated below was as follows:
| | | | | | | |
| | 2025 | | 2024 | | 2023 |
|
Consumables |
| 82.0 | % | 82.2 | % | 81.0 | % |
Seasonal |
| 10.1 | % | 10.0 | % | 10.6 | % |
Home products |
| 5.2 | % | 5.1 | % | 5.6 | % |
Apparel |
Loading financial statements...
Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
| Line item |
|---|
| Period ending |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
General
This discussion and analysis is based on, should be read with, and is qualified in its entirety by, the accompanying unaudited consolidated financial statements and related notes, as well as our consolidated financial statements and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations as contained in our Annual Report on Form 10-K for the fiscal year ended January 30, 2026. It also should be read in conjunction with the disclosure under “Cautionary Disclosure Regarding Forward-Looking Statements” in this report.
Executive Overview
We are the largest discount retailer in the United States by number of stores, with 21,055 stores located in 48 U.S. states and Mexico as of May 1, 2026, with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States. We offer a broad selection of merchandise, including consumable products such as food, paper and cleaning products, health and beauty products and pet supplies, and non-consumable products such as seasonal merchandise, home decor and domestics, and basic apparel. Our merchandise includes national brands from leading manufacturers, as well as our own private brand selections with prices often at substantial discounts to national brands. We offer our customers these national brand and private brand products at everyday low prices (typically $10 or less) from our convenient small-box locations.
We believe our convenient store formats, locations, and broad selection of high-quality products at compelling values have driven our substantial growth and financial success over the years and through a variety of economic cycles. We are mindful that the majority of our customers are value-conscious, and many have low and/or fixed incomes. As a result, we are intensely focused on helping our customers make the most of their spending dollars. The primary macroeconomic factors that affect our core customers include unemployment and underemployment rates, inflation (including, but not limited to, high or rising gas prices), wage growth, changes in federal and state tax policies, interest rates, changes in U.S. and global trade policy (including resulting price increases), and changes in U.S. government policy and assistance programs (including cost of living adjustments and work requirements), such as SNAP, unemployment benefits, and economic stimulus programs. Finally, significant unseasonable or unusual weather patterns or extreme weather can impact customer shopping behaviors.
Uncertainty remains regarding the potential impact of tariffs on consumer behavior and our business. Tariff rates on both direct imports and domestic purchases did not materially impact our financial results for the first quarter of 2026. The tariff environment remains dynamic, and the specific tariffs applicable to goods imported by us and our suppliers into the U.S. may continue to evolve. Tariff rate increases or expansions of tariff coverage affecting the products that we sell could have a significant impact on our business and on our customers’ budgets. We continue to monitor developments and will evaluate the impact of any tariff rate changes on our business and take action to mitigate such impact. There can be no assurance we will be successful in our efforts, or that price increases, if they become necessary, will not adversely affect customer behavior. Following the February 20, 2026 decision by the United States Supreme Court invalidating certain tariffs imposed under the International Emergency Economic Powers Act, we submitted claims with U.S. Customs and Border Protection seeking refunds for such tariffs that we previously paid. The exact timing and amount of refunds remain subject to uncertainty.
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 conditions, particularly when trends are inconsistent and of an uncertain duration. Our customers continue to feel constrained in the current macroeconomic environment and to experience elevated expenses that generally comprise a large portion of their household budgets, such as rent, healthcare, energy and fuel prices, as well as cost inflation in frequently purchased household products (including food), which we expect will continue to pressure our customers’ spending overall.
We remain committed to our long-term operating priorities as we consistently strive to improve our performance while retaining our customer-centric focus. 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 the growth and development of our teams.
20
We seek to drive profitable sales growth through initiatives aimed at increasing customer traffic and average transaction amount. Historically, sales in our consumables category, which tend to have lower gross margins, have been key drivers of net sales and customer traffic, while sales in our non-consumables categories, which tend to have higher gross margins, have been key drivers of more profitable sales growth and average transaction amount. Our sales mix remains heavily weighted towards consumables, although non-consumables have outpaced consumables in same-store sales growth for the last five consecutive quarters. Certain of our initiatives are intended to better optimize our sales mix; however, there can be no assurances that these efforts will be successful.
As we work to provide everyday low prices and meet our customers’ affordability needs, we remain focused on enhancing our margins through inventory shrink and damage reduction initiatives (which helped to partially mitigate our significant fuel costs), as well as pricing and markdown optimization, the DG Media Network (our platform that connects brand partners with our customers), effective category management and inventory reduction efforts, distribution and transportation efficiencies, private brands penetration and global sourcing strategies. Several of our strategic and other sales-driving initiatives are also designed to capture growth opportunities.
Inventory shrink has significantly improved from elevated levels in recent years, and although damages remain elevated, we have made progress reducing damages for the last five consecutive quarters. We continue to implement actions designed to drive sustained improvement in both shrink and damages.
We continue to implement and invest in certain strategic initiatives intended to drive profitable sales growth with both new and existing customers and capture long-term growth opportunities. Such initiatives include providing our customers with a variety of shopping access points and even greater value and convenience by leveraging and developing digital tools and technology, such as our Dollar General app, which contains a variety of tools to enhance the shopping experience. We remain focused on enhancing both the in-store and digital shopping experience, while driving operational efficiency. The delivery component of our digital initiatives contributes meaningfully to our comparable store sales performance. Third-party delivery services and myDG® Delivery are available in the majority of our stores, providing added convenience and incremental sales. We believe these digital efforts will contribute to the continued growth of our DG Media Network.
We have continued our efforts to improve the performance and profitability of our mature stores through our remodel program, which includes both full remodels under Project Renovate and partial remodels under Project Elevate. Together, these remodel programs are designed to refresh and optimize merchandising and store presentation, enhance the shopping experience for our customers, and potentially mitigate future repairs and maintenance expense.
We also remain focused on capturing growth opportunities. In 2026, we plan to open approximately 450 new stores (as well as approximately 10 stores in Mexico), remodel approximately 2,000 stores through Project Renovate, remodel approximately 2,250 stores through Project Elevate, and relocate approximately 20 stores, for a total of 4,730 real estate projects. As part of this plan, in the first quarter of 2026 we opened a total of 195 new stores, including 5 stores in Mexico, remodeled 659 stores through Project Renovate and 711 stores through Project Elevate, relocated 6 stores and closed 33 stores.
We expect store format innovation to allow us to capture additional growth opportunities as we continue to utilize the most productive of our various Dollar General store formats based on the specific market opportunity. In 2026, we are utilizing store formats averaging approximately 8,500 square feet of selling space for the significant majority of new stores. These formats allow for expanded high-capacity-cooler counts, an extended queue line, and a broader product assortment, including an enhanced non-consumable offering, a larger health and beauty section, and produce in select stores.
Finally, pOpshelf, our unique retail concept focused on categories such as seasonal and home décor, health and beauty, home cleaning supplies, and party and entertainment goods, represents an additional potential growth opportunity. At the end of the first quarter of 2026, we operated 180 standalone pOpshelf stores. We continue to take focused actions designed to improve the performance of pOpshelf stores, although there can be no assurances that our efforts will be successful.
We always seek ways to reduce or control costs that do not affect our customers’ shopping experiences. We plan to continue enhancing our position as a low-cost operator over time while employing ongoing cost discipline to reduce certain expenses as a percentage of sales. Nonetheless, we seek to maintain flexibility to invest in the business as
21
necessary to enhance our long-term competitiveness and profitability. From time to time, our strategic initiatives, including without limitation those discussed above, have required and may continue to require us to incur upfront expenses for which there may not be an immediate 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 forces such as labor availability, increases in minimum wage rates, inflation, property rents and interest rates. Significant or rapid increases to federal, state or local minimum wage rates or salary levels could significantly adversely affect our earnings if we are not able to otherwise offset these increased labor costs elsewhere in our business.
We believe ongoing inflationary pressures could continue to affect our vendors and customers and our operating results. Both inflation and higher interest rates have significantly increased new store opening costs and occupancy costs in recent years and, while new store returns remain strong, these increased costs have negatively impacted our projected new store returns and influenced our new store growth plans. Furthermore, we incurred significantly higher fuel costs in the first quarter of 2026, and we expect this trend to continue for an uncertain duration.
Our teams are a competitive advantage, and we proactively seek ways to continue investing in their development. Our goal is to create an environment that attracts, develops, and retains talented personnel, particularly at the store manager level, as employees who are promoted from within our company generally have longer tenures and are greater contributors to improvements in our financial performance. We are taking actions designed to continue reducing our store manager turnover, including enhancing training execution, improving store conditions and simplifying in-store activities.
Key Performance Indicators
We utilize key performance indicators, which are defined below, in the management of our business including same-store sales, average sales per square foot, and inventory turnover. We use these measures to maximize profitability and for decisions about the allocation of resources. Each of these measures is commonly used by investors in retail companies to measure the health of the business.
Same-store sales are calculated based upon our stores that were open at least 13 full fiscal months and remain open at the end of the reporting period. We include stores that have been remodeled, expanded or relocated in our same-store sales calculation. Changes in same-store sales are calculated based on the comparable 52 calendar weeks in the current and prior years. The method of calculating same-store sales varies across the retail industry. As a result, our calculation of same-store sales is not necessarily comparable to similarly titled measures reported by other companies.
| | | | | | | |
| | 13 Weeks Ended | | ||||
| | May 1, | | May 2, | | ||
| | 2026 | | 2025 | | ||
Same-store sales | | 2.0 | % | | 2.4 | % | |
Average sales per square foot is calculated based on total sales for the preceding four quarters as of the ending date of the reporting period divided by the average selling square footage as of the end of the most recent five quarters.
| | | | | | |
| | May 1, | | May 2, | ||
| | 2026 | | 2025 | ||
Average sales per square foot | | $ | 271 | | $ | 265 |
Inventory turnover is calculated based on total cost of goods sold for the preceding four quarters as of the ending date of the reporting period divided by the average inventory balance as of the end of the most recent five quarters.
| | | | |
| | May 1, | | May 2, |
| | 2026 | | 2025 |
Inventory turnover | | 4.5 | | 4.2 |
22
Results of Operations
Accounting Periods. We utilize a 52-53 week fiscal year convention that ends on the Friday nearest to January 31. The following text contains references to years 2026 and 2025, which represent the 52-week fiscal years ending or ended January 29, 2027 and January 30, 2026, respectively. References to the first quarter accounting periods for 2026 and 2025 contained herein refer to the 13-week accounting periods ended May 1, 2026 and May 2, 2025, respectively.
Seasonality. The nature of our business is somewhat seasonal. Primarily because of sales of Christmas-related merchandise, operating profit in our fourth quarter (November, December and January) has historically been higher than operating profit achieved in each of the first three quarters of the fiscal year. Expenses, and to a greater extent operating profit, vary by quarter. Results of a period shorter than a full year may not be indicative of results expected for the entire year. Furthermore, the seasonal nature of our business may affect comparisons between periods.
The following tables contain results of operations data for the first 13-week periods of 2026 and 2025, and the dollar and percentage variances among those periods. Basis point amounts referred to below are equal to 0.01% as a percentage of net sales:
| | | | | | | | | |
| | 13 Weeks Ended | | ||||||
(amounts in millions, except | | May 1, | | May 2, | | % | | ||
per share amounts) | | 2026 | | 2025 | | Change | | ||
Net sales | | $ | 10,787.0 | | $ | 10,436.0 | | 3.4 | % |
Cost of goods sold | |
| 7,376.5 | |
| 7,204.7 | | 2.4 | |
Gross profit | |
| 3,410.5 | |
| 3,231.3 | | 5.5 | |
Selling, general and administrative expenses | |
| 2,772.0 | |
| 2,655.2 | | 4.4 | |
Operating profit | |
| 638.5 | |
| 576.1 | | 10.8 | |
Interest expense, net | |
| 47.2 | |
| 64.6 | | (26.9) | |
Income before income taxes | |
| 591.3 | |
| 511.5 | | 15.6 | |
Income tax expense | |
| 147.2 | |
| 119.6 | | 23.1 | |
Net income | | $ | 444.1 | | $ | 391.9 | | 13.3 | % |
Diluted earnings per share | | $ | 2.00 | | $ | 1.78 | | 12.4 | % |
| | | | | | | |
| | 13 Weeks Ended | | ||||
| | May 1, | | May 2, | | Basis Point | |
(Percent of Net Sales) | | 2026 | | 2025 | | Change | |
Net sales | | 100.00 | % | 100.00 | % | | |
Cost of goods sold | | 68.38 | | 69.04 | | (65) | |
Gross profit | | 31.62 | | 30.96 | | 65 | |
Selling, general and administrative expenses | | 25.70 | | 25.44 | | 25 | |
Operating profit | | 5.92 | | 5.52 | | 40 | |
Interest expense, net | | 0.44 | | 0.62 | | (18) | |
Income before income taxes | | 5.48 | | 4.90 | | 58 | |
Income tax expense | | 1.36 | | 1.15 | | 22 | |
Net income | | 4.12 | % | 3.76 | % | 36 | |
13 WEEKS ENDED MAY 1, 2026 AND MAY 2, 2025
Net Sales. For the 2026 period, net sales increased 3.4% to $10.79 billion. The net sales increase in the 2026 period was primarily due to sales from new stores and a same-store sales increase of 2.0% compared to the 2025 period, partially offset by the impact of store closures. The increase in same-store sales reflects a 1.4% increase in customer traffic and a 0.5% increase in average transaction amount. The increase in average transaction amount was driven by higher average retail prices offset by a decrease in items per transaction. Same-store sales increased in the consumables, seasonal, apparel and home products categories. For the 2026 period, there were 20,339 same-stores, which accounted for sales of $10.50 billion.
The amount of net sales represented by each of our product categories for the 13 weeks ended May 1, 2026, and May 2, 2025, as well as the percentage change between such periods, were as follows:
23
| | | | | | | | | | |
| | 13 Weeks Ended | | | ||||||
| | May 1, | | May 2, | | % | | | ||
(amounts in millions) | | 2026 | | 2025 | | Change | | | ||
Net sales by category: | | | | | | | | | | |
Consumables | | $ | 8,892.5 | | $ | 8,636.7 | | 3.0 | % | |
Seasonal | |
| 1,084.3 | |
| 1,022.9 | | 6.0 | | |
Home products | |
| 523.0 | |
| 507.2 | | 3.1 | | |
Apparel | |
| 287.2 | |
| 269.2 | | 6.7 | | |
Net sales | | $ | 10,787.0 | | $ | 10,436.0 | | 3.4 | % | |
The percentage of net sales represented by each of our product categories for the 13 weeks ended May 1, 2026, and May 2, 2025, were as follows:
| | | | | |
| | 13 Weeks Ended | | ||
| | May 1, | | May 2, | |
| | 2026 | | 2025 | |
Net sales by category: | | | | | |
Consumables | | 82.44 | % | 82.76 | % |
Seasonal | | 10.05 | | 9.80 | |
Home products | | 4.85 | | 4.86 | |
Apparel | | 2.66 | | 2.58 | |
Net sales | | 100.00 | % | 100.00 | % |
Gross Profit. For the 2026 period, gross profit increased by 5.5%, and as a percentage of net sales increased by 65 basis points to 31.6%, compared to the 2025 period. The increase in the gross profit rate was driven primarily by higher inventory markups, and lower shrink and damages, partially offset by increased markdowns and transportation costs.
Selling, General & Administrative Expenses (“SG&A”). SG&A was 25.7% as a percentage of net sales in the 2026 period compared to 25.4% in the comparable 2025 period, an increase of 25 basis points. The primary expenses that were a higher percentage of net sales in the current year period were depreciation and amortization, utilities, and property taxes, partially offset by lower incentive compensation.
Interest Expense, net. Interest expense, net decreased by $17.4 million to $47.2 million in the 2026 period primarily due to lower average outstanding borrowings.
Income Taxes. The effective income tax rate for the 2026 period was 24.9% compared to a rate of 23.4% for the 2025 period. The tax rate for the 2026 period was higher than the comparable 2025 period primarily due to expired federal tax credits, partially offset by decreased expense from stock-based compensation.
Liquidity and Capital Resources
We believe our cash flow from operations and existing cash balances, combined with availability under the unsecured revolving credit facility (the “Revolving Facility”), the unsecured commercial paper notes (the “CP Notes”) and access to the debt markets, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, capital spending, and anticipated dividend payments for a period that includes the next twelve months as well as the next several years. However, our ability to maintain sufficient liquidity may be affected by numerous factors, many of which are outside of our control. Depending on our liquidity levels, conditions in the capital markets and other factors, we may from time to time consider the issuance of debt, equity or other securities, the proceeds of which could provide additional liquidity for our operations. All of our material borrowing arrangements are described in greater detail in Note 5 to the unaudited consolidated financial statements.
Our borrowing availability under the Revolving Facility may be effectively limited by our CP Notes as further described in Note 5 to the unaudited consolidated financial statements. For the remainder of fiscal 2026, we anticipate potential combined borrowings under the Revolving Facility and our CP Notes to be a maximum of approximately $400 million outstanding at any one time.
24
Current Financial Condition / Recent Developments
Our inventory balance represented approximately 44% of our total assets, exclusive of operating lease assets, goodwill and other intangible assets, as of May 1, 2026. Our ability to effectively manage our inventory balances can have a significant impact on our cash flows from operations during a given fiscal year, as discussed below. Inventory purchases are often somewhat seasonal in nature, such as the purchase of warm-weather or Christmas-related merchandise. Efficient management of our inventory has been and continues to be an area of focus for us.
From time to time, we are involved in various legal matters as discussed in Note 7 to the unaudited consolidated financial statements, some of which could potentially result in material cash payments. Adverse developments in these matters could materially and adversely affect our liquidity.
Our current credit ratings, as well as future rating agency actions, could (i) impact our ability to finance our operations on satisfactory terms; (ii) affect our financing costs; and (iii) affect our insurance premiums and collateral requirements necessary for our self-insured programs. There can be no assurance that we will maintain or improve our current credit ratings, particularly, if we are unable to lower our leverage ratios to levels and within time frames deemed acceptable to the rating agencies. The credit ratings for our borrowings are as follows:
| | | ||||
Rating Agency | | Senior unsecured debt rating | | Commercial paper rating | | Outlook |
Moody’s | | Baa3 | | P-3 | | Stable outlook |
Standard & Poor’s | | BBB | | A-2 | | Stable outlook |
Changes in Cash Flows
Unless otherwise noted, all references to the 2026 and 2025 periods in the discussion of cash flows from operating, investing and financing activities below refer to the 13-week periods ended May 1, 2026 and May 2, 2025, respectively.
Cash flows from operating activities. Cash flows from operating activities were $0.7 billion in the 2026 period, which represents a $131.0 million decrease compared to the 2025 period. Net income increased $52.2 million in the 2026 period compared to the 2025 period. Changes in accounts payable resulted in a $293.5 million increase in the 2026 period compared to a $35.1 million decrease in the 2025 period, due primarily to the timing of inventory receipts and related payments. Changes in merchandise inventories resulted in a $308.1 million decrease in the 2026 period as compared to an increase of $124.8 million in the 2025 period as further discussed below. Changes in accrued expenses resulted in a $113.5 million decrease in the 2026 period compared to a $3.0 million decrease in the 2025 period, due primarily to the timing of accruals and payments for incentive compensation and interest. Changes in income taxes in the 2026 period compared to the 2025 period are primarily due to the amount of income tax accrued and timing of payments.
On an ongoing basis, we closely monitor and manage our inventory balances, which may fluctuate from period to period based on new store openings, the timing of purchases, and other factors. Total merchandise inventories increased 5% in the 2026 period compared to a decrease of 2% in the 2025 period. Percent changes in our four inventory categories for the 2026 period compared to the 2025 period were as follows:
| | | | | | |
| | 13 Weeks Ended | | |||
| | May 1, | | | May 2, | |
Increase (decrease) | | 2026 | | | 2025 |
|
Consumables | | 8 | % | | 1 | % |
Seasonal | | (1) | | | (5) | |
Home products | | 4 | | | (8) | |
Apparel | | (7) | | | (8) | |
25
Next expected filings
- ~2026-08-27 10-Q expected by 2026-09-07 (in 73 days)
- ~2026-12-03 10-Q expected by 2026-12-14 (in 171 days)
- ~2027-03-19 10-K expected by 2027-03-30 (in 277 days)
- ~2027-06-01 10-Q expected by 2027-06-12 (in 351 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-06-02 8-K Earnings Release; Shareholder Vote Results; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-06-02 10-Q Quarterly Report
- 2026-04-07 DEF 14A Proxy Statement
- 2026-03-24 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-03-20 10-K Annual Report
- 2026-03-12 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-02-03 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-12-04 10-Q Quarterly Report
- 2025-12-04 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-11-17 8-K/A Officer/Director Change; Financial Statements and Exhibits
- 2025-11-13 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-08-28 10-Q Quarterly Report
- 2025-08-28 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-08-20 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-07-16 8-K Officer/Director Change; Financial Statements and Exhibits