David Burrows Dollar General Corp. DG-N DON'T BUY Sep 04, 2024

It is a play on the lower economic portion of the economy and will continue to see a substantial portion of the economy. He doesn't like the demographics and doesn't buy retail.

If Trump slaps tariffs on Chinese goods, the dollar stores will suffer badly.

Questions about health of lower-income consumer. Both companies have flagged this on conference calls. DLTR is taking steps to increase price points, and an improving consumer would be a tailwind. If he had to choose, DLTR would be his pick.

Reflects the bifurcated consumer market in the US. Higher-end names that cater to higher-end income levels are doing well. But DG is only in the income segment that's been impacted the most by higher prices.

It yields 3%, but Walmart is crushing it.

He sold it in April and now owns Costco in this space. It is trying to turn things around and get efficiencies up. It plunged after an announcement in late August.

It reports Thursday. This and Dollar Tree have been eclipsed by Walmart, who is not at the mercy of the big suppliers.

It reports Wednesday. How much longer can they put a lid on prices, driven up by tariffs? That said, he expect a good quarter, because they got a lot of merchandise before tariffs. But he's worried about guidance--they may need to raise prices.

Yesterday they reported a fine quarter: beating revenue, 2.4% same-store sales growth (beating) with strength in every major product category, gross margins beat due to a theft crackdown. Earnings beat and were excellent. DG repeated tat they will keep prices low amid Trump tariffs. DG's customer survey revealed that 60% of their customers have less income than a year ago and will sacrifice some necessities in the coming year; this doesn't bode well for the economy, but make dollar stores compelling. DG is seeing more business from middle/high-income earners. Tariffs: DG imports 4% directly from China.