DG

Dollar General is the largest US discount retailer by store count (20,959 stores across 48 states plus Mexico), and the FY2026 numbers show a clear earnings inflection after a two-year profit slump. Revenue grew to $42.7B (+5.2% YoY) and has compounded every year from $34.2B in FY2022, demonstrating durability through varied economic cycles — exactly what the MD&A claims. More important is the bottom-line turn: net income rebounded to $1.51B (+34.4%) off the FY2025 trough of $1.13B, operating income jumped +28.6% to $2.20B, and diluted EPS rose +34.1% to $6.85. Gross profit grew +9.0% (faster than sales), lifting gross margin to 30.7%, the visible fruit of management's stated shrink-reduction, markdown-optimization, private-brand and DG Media Network initiatives.

The quality and capital story support the call. ROE is a healthy 17.8% and stockholders' equity grew +14.8% to $8.51B while total liabilities fell -5.3% to $22.5B, so the balance sheet is strengthening rather than levering up. Cash flow is the standout: operating cash flow of $3.63B (+21.3%) against capex of only $1.24B (-5.2%) implies roughly $2.4B of free cash flow, comfortably funding the $520M dividend with ample room left for buybacks and debt paydown. Cash rose +22.1% to $1.14B and retained earnings climbed +29.2%.