GOODLETTSVILLE, Tenn. — Dollar General will break its own record for store expansion in 2017. And that’s saying a lot.
The discounter is already in high gear, with plans to open a record 900 stores and remodel or relocate about 875 existing locations in 2016. But it’s upping the total for 2017, forecasting some 1,000 new stores and 900 remodels or relocations, which is in line with its model of 6% to 8% square footage growth.
“Dollar General has a powerful strategic plan that enables us to drive both the top line and bottom line to deliver strong financial returns as outlined in our growth model over the long-term,” said Dollar General CEO Todd Vasos. “With strong cash flow and an efficient capital structure, we believe that we have a compelling opportunity to invest for growth while also returning cash to shareholders through consistent share repurchases and anticipated quarterly dividends.
In 2015, Dollar General opened 730 new stores and remodeled or relocated 881 stores which combined with a 2.8% same-store sales increase allowed it to grow total sales 7.7% to $20.4 billion. The company ended its fiscal year on Jan. 29, with 12,483 stores.
Dollar General revealed its plans for 2017 late Wednesday, on the eve of the company’s March 24 investor conference. In addition to the heightened level of new store growth and remodeling activity, ahead of the meeting the company shared an update on other key initiatives and performance assumptions.
For example, Dollar General believes it can deliver a total annual return to shareholders in the range of 11% to 17% when combining profit growth with dividends. Accordingly, the company has established a financial model that assumes its annual square footage growth of 6% to 8% is complemented by same-store sales growth in the range of 2% to 4%. Doing so will enable the company to drive annual sales growth in the range of 7% to 10% and earnings per share in the range of 10% to 15%.
Dollar General has previously indicated it sees the potential to operate as many as 20,000 stores throughout the U.S.