Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Feb. 03, 2023 | Mar. 22, 2023 | Jul. 29, 2022 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Feb. 03, 2023 | ||
Entity File Number | 001-11421 | ||
Entity Registrant Name | DOLLAR GENERAL CORPORATION | ||
Entity Incorporation, State or Country Code | TN | ||
Entity Tax Identification Number | 61-0502302 | ||
Entity Address, Address Line One | 100 MISSION RIDGE | ||
Entity Address, City or Town | GOODLETTSVILLE | ||
Entity Address, State or Province | TN | ||
Entity Address, Postal Zip Code | 37072 | ||
City Area Code | 615 | ||
Local Phone Number | 855-4000 | ||
Title of 12(b) Security | Common Stock, par value $0.875 per share | ||
Trading Symbol | DG | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 219,108,477 | ||
Entity Public Float | $ 55.9 | ||
Current Fiscal Year End Date | --02-03 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000029534 | ||
Amendment Flag | false | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | Nashville, Tennessee |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Feb. 03, 2023 | Jan. 28, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 381,576 | $ 344,829 |
Merchandise inventories | 6,760,733 | 5,614,325 |
Income taxes receivable | 135,775 | 97,394 |
Prepaid expenses and other current assets | 302,925 | 247,295 |
Total current assets | 7,581,009 | 6,303,843 |
Net property and equipment | 5,236,309 | 4,346,127 |
Operating lease assets | 10,670,014 | 10,092,930 |
Goodwill | 4,338,589 | 4,338,589 |
Other intangible assets, net | 1,199,700 | 1,199,750 |
Other assets, net | 57,746 | 46,132 |
Total assets | 29,083,367 | 26,327,371 |
Current liabilities: | ||
Current portion of operating lease liabilities | 1,288,939 | 1,183,559 |
Accounts payable | 3,552,991 | 3,738,604 |
Accrued expenses and other | 1,036,919 | 1,049,139 |
Income taxes payable | 8,919 | 8,055 |
Total current liabilities | 5,887,768 | 5,979,357 |
Long-term obligations | 7,009,399 | 4,172,068 |
Long-term operating lease liabilities | 9,362,761 | 8,890,709 |
Deferred income taxes | 1,060,906 | 825,254 |
Other liabilities | 220,761 | 197,997 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock | ||
Common stock; $0.875 par value, 1,000,000 shares authorized, 219,105 and 230,016 shares issued and outstanding at February 3, 2023 and January 28, 2022, respectively | 191,718 | 201,265 |
Additional paid-in capital | 3,693,871 | 3,587,914 |
Retained earnings | 1,656,140 | 2,473,999 |
Accumulated other comprehensive loss | 43 | (1,192) |
Total shareholders' equity | 5,541,772 | 6,261,986 |
Total liabilities and shareholders' equity | $ 29,083,367 | $ 26,327,371 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Feb. 03, 2023 | Jan. 28, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.875 | $ 0.875 |
Common stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, shares issued | 219,105 | 230,016 |
Common stock, shares outstanding | 219,105 | 230,016 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
Net sales | $ 37,844,863 | $ 34,220,449 | $ 33,746,839 |
Cost of goods sold | 26,024,765 | 23,407,443 | 23,027,977 |
Gross profit | 11,820,098 | 10,813,006 | 10,718,862 |
Selling, general and administrative expenses | 8,491,796 | 7,592,331 | 7,164,097 |
Operating profit | 3,328,302 | 3,220,675 | 3,554,765 |
Interest expense | 211,273 | 157,526 | 150,385 |
Other (income) expense | 415 | ||
Income before income taxes | 3,116,614 | 3,063,149 | 3,404,380 |
Income tax expense | 700,625 | 663,917 | 749,330 |
Net income | $ 2,415,989 | $ 2,399,232 | $ 2,655,050 |
Earnings per share | |||
Basic (in dollars per share) | $ 10.73 | $ 10.24 | $ 10.70 |
Diluted (in dollars per share) | $ 10.68 | $ 10.17 | $ 10.62 |
Weighted average shares outstanding: | |||
Basic (in shares) | 225,148 | 234,261 | 248,171 |
Diluted (in shares) | 226,297 | 235,812 | 250,076 |
Dividends per share | $ 2.20 | $ 1.68 | $ 1.44 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 2,415,989 | $ 2,399,232 | $ 2,655,050 |
Unrealized net gain (loss) on hedged transactions and currency translation, net of related income tax expense (benefit) of $353, $346, and $346, respectively | 1,235 | 971 | 972 |
Comprehensive income | $ 2,417,224 | $ 2,400,203 | $ 2,656,022 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Unrealized net gain (loss) on hedged transactions, income tax expense (benefit) | $ 353 | $ 346 | $ 346 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total |
Balances at Jan. 31, 2020 | $ 220,444 | $ 3,322,531 | $ 3,162,660 | $ (3,135) | $ 6,702,500 |
Balances (in shares) at Jan. 31, 2020 | 251,936 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 2,655,050 | 2,655,050 | |||
Dividends per common share | (355,934) | (355,934) | |||
Unrealized net gain (loss) on hedged transactions and currency translation | 972 | 972 | |||
Share-based compensation expense | 68,609 | 68,609 | |||
Repurchases of common stock | $ (10,760) | (2,455,674) | (2,466,434) | ||
Repurchases of common stock (in shares) | (12,297) | ||||
Other equity and related transactions | $ 1,003 | 55,472 | 56,475 | ||
Other equity and related transactions (in shares) | 1,146 | ||||
Balances at Jan. 29, 2021 | $ 210,687 | 3,446,612 | 3,006,102 | (2,163) | 6,661,238 |
Balances (in shares) at Jan. 29, 2021 | 240,785 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 2,399,232 | 2,399,232 | |||
Dividends per common share | (392,217) | (392,217) | |||
Unrealized net gain (loss) on hedged transactions and currency translation | 971 | 971 | |||
Share-based compensation expense | 78,178 | 78,178 | |||
Repurchases of common stock | $ (10,551) | (2,539,118) | (2,549,669) | ||
Repurchases of common stock (in shares) | (12,058) | ||||
Other equity and related transactions | $ 1,129 | 63,124 | 64,253 | ||
Other equity and related transactions (in shares) | 1,289 | ||||
Balances at Jan. 28, 2022 | $ 201,265 | 3,587,914 | 2,473,999 | (1,192) | $ 6,261,986 |
Balances (in shares) at Jan. 28, 2022 | 230,016 | 230,016 | |||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 2,415,989 | $ 2,415,989 | |||
Dividends per common share | (493,732) | (493,732) | |||
Unrealized net gain (loss) on hedged transactions and currency translation | 1,235 | 1,235 | |||
Share-based compensation expense | 72,712 | 72,712 | |||
Repurchases of common stock | $ (10,188) | (2,737,826) | (2,748,014) | ||
Repurchases of common stock (in shares) | (11,643) | ||||
Excise tax incurred on common stock repurchases | (2,290) | (2,290) | |||
Other equity and related transactions | $ 641 | 33,245 | 33,886 | ||
Other equity and related transactions (in shares) | 732 | ||||
Balances at Feb. 03, 2023 | $ 191,718 | $ 3,693,871 | $ 1,656,140 | $ 43 | $ 5,541,772 |
Balances (in shares) at Feb. 03, 2023 | 219,105 | 219,105 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |||||
Feb. 03, 2023 | Oct. 28, 2022 | Jul. 29, 2022 | Apr. 29, 2022 | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY | |||||||
Dividends per share | $ 0.55 | $ 0.55 | $ 0.55 | $ 0.55 | $ 2.20 | $ 1.68 | $ 1.44 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Cash flows from operating activities: | |||
Net income | $ 2,415,989 | $ 2,399,232 | $ 2,655,050 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Depreciation and amortization | 724,877 | 641,316 | 574,237 |
Deferred income taxes | 235,299 | 114,359 | 34,976 |
Noncash share-based compensation | 72,712 | 78,178 | 68,609 |
Other noncash (gains) and losses | 530,530 | 191,040 | 11,570 |
Change in operating assets and liabilities: | |||
Merchandise inventories | (1,665,352) | (550,114) | (575,827) |
Prepaid expenses and other current assets | (65,102) | (47,471) | (16,516) |
Accounts payable | (194,722) | 98,735 | 745,596 |
Accrued expenses and other liabilities | (25,409) | (37,328) | 388,597 |
Income taxes | (37,517) | (14,642) | (6,522) |
Other | (6,750) | (7,494) | (3,611) |
Net cash provided by (used in) operating activities | 1,984,555 | 2,865,811 | 3,876,159 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (1,560,582) | (1,070,460) | (1,027,963) |
Proceeds from sales of property and equipment | 5,236 | 4,903 | 3,053 |
Net cash provided by (used in) investing activities | (1,555,346) | (1,065,557) | (1,024,910) |
Cash flows from financing activities: | |||
Issuance of long-term obligations | 2,296,053 | 1,494,315 | |
Repayments of long-term obligations | (911,330) | (6,402) | (4,640) |
Net increase (decrease) in commercial paper outstanding | 1,447,600 | 54,300 | (425,200) |
Borrowings under revolving credit facilities | 300,000 | ||
Repayments of borrowings under revolving credit facilities | (300,000) | ||
Costs associated with issuance of debt | (16,925) | (2,268) | (13,574) |
Repurchases of common stock | (2,748,014) | (2,549,669) | (2,466,434) |
Payments of cash dividends | (493,726) | (392,188) | (355,926) |
Other equity and related transactions | 33,880 | 64,225 | 56,467 |
Net cash provided by (used in) financing activities | (392,462) | (2,832,002) | (1,714,992) |
Net increase (decrease) in cash and cash equivalents | 36,747 | (1,031,748) | 1,136,257 |
Cash and cash equivalents, beginning of period | 344,829 | 1,376,577 | 240,320 |
Cash and cash equivalents, end of period | 381,576 | 344,829 | 1,376,577 |
Cash paid for: | |||
Interest | 195,312 | 159,803 | 128,211 |
Income taxes | 500,814 | 568,267 | 721,570 |
Supplemental noncash investing and financing activities: | |||
Right of use assets obtained in exchange for new operating lease liabilities | 1,836,718 | 1,778,564 | 1,721,530 |
Purchases of property and equipment awaiting processing for payment, included in Accounts payable | $ 150,694 | $ 143,589 | $ 118,059 |
Basis of presentation and accou
Basis of presentation and accounting policies | 12 Months Ended |
Feb. 03, 2023 | |
Basis of presentation and accounting policies | |
Basis of presentation and accounting policies | DOLLAR GENERAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of presentation and accounting policies Basis of presentation These notes contain references to the years 2022, 2021, and 2020, which represent fiscal years ended February 3, 2023, January 28, 2022, and January 29, 2021, respectively. The Company’s 2022 accounting period was comprised of 53 weeks, and the 2021 and 2020 accounting periods were each comprised of 52 weeks. The Company’s fiscal year ends on the Friday closest to January 31. The consolidated financial statements include all subsidiaries of the Company, except for its not-for-profit subsidiary which the Company does not control. Intercompany transactions have been eliminated. The Company sells general merchandise on a retail basis through 19,104 stores (as of February 3, 2023) in 47 states with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States. As of February 3, 2023, the Company operated 19 distribution centers for non-refrigerated products, ten cold storage distribution centers, and two combination distribution centers which have both refrigerated and non-refrigerated products. The Company leases 14 of these facilities and the remainder are owned. Cash and cash equivalents Cash and cash equivalents include highly liquid investments with insignificant interest rate risk and original maturities of three months or less when purchased. Such investments primarily consist of money market funds, bank deposits, certificates of deposit, and commercial paper. The carrying amounts of these items are a reasonable estimate of their fair value due to the short maturity of these investments. Payments due from processors for electronic tender transactions classified as cash and cash equivalents totaled approximately $157.3 million and $133.9 million at February 3, 2023 and January 28, 2022, respectively. Investments in debt and equity securities The Company accounts for investments in debt and marketable equity securities as held-to-maturity, available-for-sale, or trading, depending on their classification. Debt securities categorized as held-to-maturity are stated at amortized cost. Debt and equity securities categorized as available-for-sale are stated at fair value, with any unrealized gains and losses, net of deferred income taxes, reported as a component of Accumulated other comprehensive loss. Trading securities are stated at fair value, with changes in fair value recorded as a component of Selling, general and administrative (“SG&A”) expense. The cost of securities sold is based upon the specific identification method. Merchandise inventories Inventories are stated at the lower of cost or market (“LCM”) with cost determined using the retail last-in, first-out (“LIFO”) method as this method results in a better matching of costs and revenues. Under the Company’s retail inventory method (“RIM”), the calculation of gross profit and the resulting valuation of inventories at cost are computed by applying a calculated cost-to-retail inventory ratio to the retail value of sales at a department level. The use of the RIM will result in valuing inventories at LCM if markdowns are currently taken as a reduction of the retail value of inventories. Costs directly associated with warehousing and distribution are capitalized into inventory. The excess of current cost over LIFO cost was approximately $813.6 million and $296.3 million at February 3, 2023 and January 28, 2022, respectively. Current cost is determined using the RIM on a first-in, first-out basis. Under the LIFO inventory method, the impacts of rising or falling market price changes increase or decrease cost of sales (the LIFO provision or benefit). The Company recorded a LIFO provision of $517.3 million in 2022, $180.4 million in 2021, and $5.1 million in 2020, which is included in cost of goods sold in the consolidated statements of income. The Company purchases its merchandise from a wide variety of suppliers. The Company’s two largest suppliers accounted for approximately 10% and 8%, respectively, of the Company’s purchases in 2022. Vendor rebates The Company accounts for all cash consideration received from vendors in accordance with applicable accounting standards pertaining to such arrangements. Cash consideration received from a vendor is generally presumed to be a rebate or an allowance and is accounted for as a reduction of merchandise purchase costs as earned. However, certain specific, incremental and otherwise qualifying SG&A expenses related to the promotion or sale of vendor products may be offset by cash consideration received from vendors, in accordance with arrangements such as cooperative advertising, when earned for dollar amounts up to but not exceeding actual incremental costs. Prepaid expenses and other current assets Prepaid expenses and other current assets include amounts receivable for certain vendor rebates and other miscellaneous receivables (primarily those expected to be collected in cash), and prepaid amounts for SAAS fees, maintenance, business licenses and insurance. Property and equipment Property and equipment acquired is recorded at cost. The Company records depreciation and amortization on a straight-line basis over the assets’ estimated useful lives. Amounts included in the Company’s property and equipment balances and their estimated lives are summarized as follows: February 3, January 28, (In thousands) Life 2023 2022 Land Indefinite $ 230,814 $ 227,085 Land improvements 20 98,567 96,402 Buildings 39 - 40 1,561,440 1,446,126 Leasehold improvements (a) 1,011,788 889,782 Furniture, fixtures and equipment 3 - 10 5,714,456 4,984,534 Construction in progress 313,615 131,073 Right of use assets - finance leases Various 215,052 162,772 9,145,732 7,937,774 Less accumulated depreciation and amortization (3,909,423) (3,591,647) Net property and equipment $ 5,236,309 $ 4,346,127 (a) Depreciated over the lesser of the life of the applicable lease term or the estimated useful life of the asset. Depreciation and amortization expense related to property and equipment was approximately $717.8 million, $635.9 million and $569.3 million for 2022, 2021 and 2020, respectively. Interest on borrowed funds during the construction of property and equipment is capitalized where applicable. Interest costs of $4.8 million, $1.2 million, and less than $0.1 million were capitalized in 2022, 2021 and 2020, respectively. Impairment of long-lived assets When indicators of impairment are present, the Company evaluates the carrying value of long-lived assets, excluding goodwill and other indefinite-lived intangible assets, in relation to the operating performance and future cash flows or the appraised values of the underlying assets. Generally, the Company’s policy is to review for impairment stores open more than three years for which current cash flows from operations are negative. Impairment results when the carrying value of the assets exceeds the undiscounted future cash flows expected to be generated by the assets. The Company’s estimate of undiscounted future cash flows is based upon historical operations of the stores and estimates of future store profitability which encompasses many factors that are subject to variability and difficult to predict. If a long-lived asset is found to be impaired, the amount recognized for impairment is equal to the difference between the carrying value and the asset’s estimated fair value. The fair value is estimated based primarily upon estimated future cash flows over the asset’s remaining useful life (discounted at the Company’s credit adjusted risk-free rate) or other reasonable estimates of fair market value. Assets to be disposed of are adjusted to the fair value less the cost to sell if less than the book value. The Company recorded impairment charges included in SG&A expense of approximately $2.1 million in 2022, $2.6 million in 2021 and $2.7 million in 2020, to reduce the carrying value of certain of its stores’ assets. Such action was deemed necessary based on the Company’s evaluation that such amounts would not be recoverable primarily due to insufficient sales or excessive costs resulting in the carrying value of the assets exceeding the estimated undiscounted future cash flows generated by the assets at these locations. Goodwill and other intangible assets If not deemed indefinite, the Company amortizes intangible assets over their estimated useful lives. Goodwill and intangible assets with indefinite lives are tested for impairment annually or more frequently if indicators of impairment are present. Definite lived intangible assets are tested for impairment if indicators of impairment are present. Impaired assets are written down to fair value as required. No impairment of intangible assets has been identified during any of the periods presented. In accordance with accounting standards for goodwill and indefinite-lived intangible assets, an entity has the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that goodwill or an indefinite-lived intangible asset is impaired. If after such assessment an entity concludes that the asset is not impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the asset using a quantitative impairment test. 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 quantitative goodwill impairment test requires management to make judgments in determining what assumptions to use in the calculation. 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. The quantitative impairment test for intangible assets compares the fair value of the intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company’s goodwill balance has an indefinite life and is not expected to be deductible for income tax purposes. Substantially all of the Company’s other intangible assets are its trade names and trademarks which have an indefinite life. Other assets Noncurrent Other assets consist primarily of investments and qualifying prepaid expenses for maintenance, and utility and other deposits. Accrued expenses and other liabilities Accrued expenses and other consist of the following: February 3, January 28, (In thousands) 2023 2022 Compensation and benefits $ 214,472 $ 215,355 Self-insurance reserves 136,911 127,719 Taxes (other than taxes on income) 296,343 324,438 Other 389,193 381,627 $ 1,036,919 $ 1,049,139 Included in other accrued expenses are liabilities for freight expense, interest, utilities, maintenance and legal settlements. Insurance liabilities The Company retains a significant portion of risk for its workers’ compensation, employee health, general liability, property, automobile, and certain third-party landlord general liability claim exposures. Accordingly, provisions are made for the Company’s estimates of such risks which are recorded as self-insurance reserves pursuant to Company policy. The undiscounted future claim costs for the workers’ compensation, general liability, landlord liability, and health claim risks are derived using actuarial methods which are sensitive to significant assumptions such as loss development factors, trend factors, pure loss rates, and projected claim counts. To the extent that subsequent claim costs vary from the Company’s estimates, future results of operations will be affected as the reserves are adjusted. Ashley River Insurance Company (“ARIC”), a Tennessee-based wholly owned captive insurance subsidiary of the Company, charges the operating subsidiary companies premiums to insure the retained workers’ compensation, medical stop-loss, and non-property general liability exposures. Pursuant to Tennessee insurance regulations, ARIC maintains certain levels of cash and cash equivalents related to its self-insured exposures. Leases The Company records operating lease right of use assets and liabilities on its balance sheet. Lease liabilities are recorded at a discount based upon the Company’s estimated collateralized incremental borrowing rate. 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. The Company records single lease cost on a straight-line basis over the base, non-cancelable lease term commencing on the date that the Company takes physical possession of the property from the landlord, which may include a period prior to the opening of a store or other facility to make any necessary leasehold improvements and install fixtures. Any tenant allowances received are recorded as a reduction of the right of use asset. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense for such leases is recognized on a straight-line basis over the lease term. The Company combines lease and nonlease components. Many leases include one or more options to renew, and the exercise of lease renewal options is at the Company’s sole discretion. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Other liabilities Fair value accounting The Company utilizes accounting standards for fair value, which include the definition of fair value, the framework for measuring fair value, and disclosures about fair value measurements. Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, fair value accounting standards establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are directly or indirectly observable for the asset or liability. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are based on an entity’s own assumptions, as there is little, if any, observable market activity. In instances where the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Other comprehensive income The Company previously recorded a loss on the settlement of derivatives associated with the issuance of long-term debt in 2013 which was deferred to other comprehensive income and is being amortized as an increase to interest expense over the 10-year Revenue recognition The Company recognizes retail sales in its stores at the time the customer takes possession of merchandise. All sales are net of discounts and are presented net of taxes assessed by governmental authorities that are imposed concurrent with those sales. The Company recognizes gift card sales revenue at the time of redemption. The liability for gift cards is established for the cash value at the time of purchase of the gift card. The liability for outstanding gift cards was approximately $10.7 million and $9.7 million at February 3, 2023 and January 28, 2022, respectively, and is recorded in Accrued expenses and other liabilities. Estimated breakage revenue, a percentage of gift cards that will never be redeemed based on historical redemption rates, is recognized over time in proportion to actual gift card redemptions. The Company recorded breakage revenue of $2.3 million, $1.7 million and $1.3 million in 2022, 2021 and 2020, respectively. Advertising costs Advertising costs are expensed upon performance, “first showing” or distribution, and are reflected in SG&A expenses net of earned cooperative advertising amounts provided by vendors which are specific, incremental and otherwise qualifying expenses related to the promotion or sale of vendor products for dollar amounts up to but not exceeding actual incremental costs. Advertising costs were $126.0 million, $117.2 million and $107.4 million in 2022, 2021 and 2020, respectively. These costs primarily include promotional circulars, targeted circulars supporting new stores, television and radio advertising, and in-store signage. Vendor funding for cooperative advertising offset reported expenses by $33.4 million, $34.3 million and $33.4 million in 2022, 2021 and 2020, respectively. Share-based payments The Company recognizes compensation expense for share-based compensation based on the fair value of the awards on the grant date. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. This estimate may be adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the prior estimate. The forfeiture rate is the estimated percentage of share-based awards granted that are expected to be forfeited or canceled before becoming fully vested. The Company bases this estimate on historical experience or estimates of future trends, as applicable. An increase in the forfeiture rate will decrease compensation expense. The fair value of each option grant is separately estimated and amortized into compensation expense on a straight-line basis between the applicable grant date and each vesting date. The Company has estimated the fair value of all stock option awards as of the grant date by applying the Black-Scholes-Merton option pricing valuation model. The application of this valuation model involves assumptions that are judgmental and highly sensitive to variation in the determination of compensation expense. The Company calculates compensation expense for restricted stock, share units and similar awards as the difference between the market price of the underlying stock or similar award on the grant date and the purchase price, if any. Such expense is recognized on a straight-line basis for time-based awards and on an accelerated or straight-line basis for performance awards depending on the period over which the recipient earns the awards. Store pre-opening costs Pre-opening costs related to new store openings and the related construction periods are expensed as incurred. Income taxes Under the accounting standards for income taxes, the asset and liability method is used for computing the future income tax consequences of events that have been recognized in the Company’s consolidated financial statements or income tax returns. Deferred income tax expense or benefit is the net change during the year in the Company’s deferred income tax assets and liabilities. The Company includes income tax related interest and penalties as a component of the provision for income tax expense. Income tax reserves are determined using a methodology which requires companies to assess each income tax position taken using a two-step process. A determination is first made as to whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the respective tax position. Uncertain tax positions require determinations and estimated liabilities to be made based on provisions of the tax law which may be subject to change or varying interpretation. If the Company’s determinations and estimates prove to be inaccurate, the resulting adjustments could be material to the Company’s future financial results. Management estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Accounting standards In March 2020 and January 2021, the Financial Accounting Standards Board (“FASB”) issued accounting standards updates pertaining to reference rate reform. This collective guidance is in response to accounting concerns regarding contract modifications and hedge accounting because of impending rate reform associated with structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of LIBOR, related to regulators in several jurisdictions around the world having undertaken reference rate reform initiatives to identify alternative reference rates. The guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The adoption of this guidance is effective for all entities as of March 12, 2020 through December 31, 2024. The Company does not expect the adoption of this guidance to have a material impact on its consolidated results of operations, financial position or cash flows. In September 2022, the FASB issued new required disclosures for supplier finance programs. This is intended to enhance the transparency about the use of supplier finance programs for investors. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with the exception of the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The amendments should be applied retrospectively to each period in which a balance sheet is presented, except for disclosure of rollforward information, which should be applied prospectively. The Company does not expect the adoption of this guidance to have a material impact on its consolidated results of operations, financial position or cash flows. |
Earnings per share
Earnings per share | 12 Months Ended |
Feb. 03, 2023 | |
Earnings per share | |
Earnings per share | 2. Earnings per share Earnings per share is computed as follows (in thousands except per share data): 2022 Weighted Net Average Per Share Income Shares Amount Basic earnings per share $ 2,415,989 225,148 $ 10.73 Effect of dilutive share-based awards 1,149 Diluted earnings per share $ 2,415,989 226,297 $ 10.68 2021 Weighted Net Average Per Share Income Shares Amount Basic earnings per share $ 2,399,232 234,261 $ 10.24 Effect of dilutive share-based awards 1,551 Diluted earnings per share $ 2,399,232 235,812 $ 10.17 2020 Weighted Net Average Per Share Income Shares Amount Basic earnings per share $ 2,655,050 248,171 $ 10.70 Effect of dilutive share-based awards 1,905 Diluted earnings per share $ 2,655,050 250,076 $ 10.62 Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share is determined based on the dilutive effect of share-based awards using the treasury stock method. Share-based awards that were outstanding at the end of the respective periods, but were not included in the computation of diluted earnings per share because the effect of exercising such options would be antidilutive, were approximately 0.1 million, 0.1 million and 0.2 million in 2022, 2021 and 2020, respectively. |
Income taxes
Income taxes | 12 Months Ended |
Feb. 03, 2023 | |
Income taxes | |
Income taxes | 3. Income taxes The provision (benefit) for income taxes consists of the following: (In thousands) 2022 2021 2020 Current: Federal $ 400,752 $ 472,913 $ 614,207 Foreign 279 384 127 State 63,562 76,261 100,002 464,593 549,558 714,336 Deferred: Federal 195,529 93,114 32,433 Foreign (24) (38) (104) State 40,527 21,283 2,665 236,032 114,359 34,994 $ 700,625 $ 663,917 $ 749,330 A reconciliation between actual income taxes and amounts computed by applying the federal statutory rate to income before income taxes is summarized as follows: (Dollars in thousands) 2022 2021 2020 U.S. federal statutory rate on earnings before income taxes $ 654,489 21.0 % $ 643,262 21.0 % $ 714,920 21.0 % State income taxes, net of federal income tax benefit 82,134 2.6 77,086 2.5 81,117 2.4 Jobs credits, net of federal income taxes (37,639) (1.2) (39,936) (1.3) (27,479) (0.8) Other, net 1,641 0.1 (16,495) (0.5) (19,228) (0.6) $ 700,625 22.5 % $ 663,917 21.7 % $ 749,330 22.0 % The effective income tax rate for 2022 was 22.5% compared to a rate of 21.7% for 2021 which represents a net increase of 0.8 percentage points. The effective income tax rate was higher in 2022 primarily due to decreased income tax benefits associated with stock-based compensation compared to 2021. The effective income tax rate for 2021 was 21.7% compared to a rate of 22.0% for 2020 which represents a net decrease of 0.3 percentage points. The effective income tax rate was lower in 2021 primarily due to increased income tax benefits associated with federal tax credits partially offset by a higher state effective tax rate in 2021 compared to 2020. Deferred taxes reflect the effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: February 3, January 28, (In thousands) 2023 2022 Deferred tax assets: Deferred compensation expense $ 12,029 $ 11,563 Accrued expenses 7,274 26,984 Accrued rent 473 552 Lease liabilities 2,760,588 2,617,954 Accrued insurance 7,514 6,971 Accrued incentive compensation 26,534 30,716 Share based compensation 15,309 16,605 Interest rate hedges 31 383 Tax benefit of income tax and interest reserves related to uncertain tax positions 77 79 State and foreign tax net operating loss carry forwards, net of federal tax 4,279 903 State tax credit carry forwards, net of federal tax 7,812 6,973 Other 22,756 16,715 2,864,676 2,736,398 Less valuation allowances, net of federal income taxes (9,001) (5,235) Total deferred tax assets 2,855,675 2,731,163 Deferred tax liabilities: Property and equipment (684,468) (572,286) Lease assets (2,728,507) (2,588,709) Inventories (176,798) (68,780) Trademarks (307,734) (310,011) Prepaid insurance (17,870) (15,278) Other (1,204) (1,353) Total deferred tax liabilities (3,916,581) (3,556,417) Net deferred tax liabilities $ (1,060,906) $ (825,254) The Company has state tax credit carryforwards of approximately $7.8 million (net of federal benefit) that will expire beginning in 2023 through 2027 and the Company has approximately $13.5 million of state apportioned net operating loss carryforwards, which will begin to expire in 2029 and will continue through 2041 The Company has a valuation allowance for certain state tax credit carryforwards and foreign net operating loss carryforwards, in the amount of $9.0 million and $5.2 million (net of federal benefit) which increased income tax expense by $3.8 million and $1.1 million in 2022 and 2021, respectively. Management believes that the results from operations will not generate sufficient taxable income to realize these deferred tax assets before they expire. Management believes that it is more likely than not that the Company’s results of operations and its existing deferred tax liabilities will generate sufficient taxable income to realize the remaining deferred tax assets. The Company’s 2018 and earlier tax years are not open for further examination by the Internal Revenue Service (“IRS”). The IRS, at its discretion, may choose to examine the Company’s 2019 through 2021 fiscal year income tax filings. The Company has various state income tax examinations that are currently in progress. Generally, with few exceptions, the Company’s 2019 and later tax years remain open for examination by the various state taxing authorities. As of February 3, 2023, accruals for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $8.0 million, $0.3 million and $0.0 million, respectively, for a total of $8.3 million. As of January 28, 2022, accruals for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $6.2 million, $0.2 million and $0.0 million, respectively, for a total of $6.4 million. These totals are reflected in noncurrent Other liabilities in the consolidated balance sheets. The Company’s reserve for uncertain tax positions is expected to be reduced by $2.4 million in the coming twelve months as a result of expiring statutes of limitations or settlements. As of February 3, 2023 and January 28, 2022, approximately $8.0 million and $6.2 million, respectively, of the uncertain tax positions would impact the Company’s effective income tax rate if the Company were to recognize the tax benefit for these positions. The amounts associated with uncertain tax positions included in income tax expense consists of the following: (In thousands) 2022 2021 2020 Income tax expense (benefit) $ 1,797 $ (1,311) $ 2,411 Income tax related interest expense (benefit) 28 (281) 104 Income tax related penalty expense (benefit) — — — A reconciliation of the uncertain income tax positions from January 31, 2020 through February 3, 2023 is as follows: (In thousands) 2022 2021 2020 Beginning balance $ 6,191 $ 7,502 $ 5,090 Increases—tax positions taken in the current year — — — Increases—tax positions taken in prior years 3,499 2,803 3,857 Decreases—tax positions taken in prior years — — (1,445) Statute expirations (1,239) (1,456) — Settlements (463) (2,658) — Ending balance $ 7,988 $ 6,191 $ 7,502 |
Leases
Leases | 12 Months Ended |
Feb. 03, 2023 | |
Leases | |
Leases | 4. Leases As of February 3, 2023, the Company’s primary leasing activities were real estate leases for most of its retail store locations and certain of its distribution facilities. Many of the Company’s store locations are subject to build-to-suit arrangements with landlords which typically carry a primary lease term of up to 15 years. The Company does not control build-to-suit properties during the construction period. Store locations not subject to build-to-suit arrangements are typically shorter-term leases. Certain of the Company’s leased store locations have variable payments based upon actual costs of common area maintenance, real estate taxes and property and liability insurance. In addition, some of the Company’s leased store locations have provisions for variable payments based upon a specified percentage of defined sales volume. The Company’s lease agreements generally do not contain material restrictive covenants. Most of the Company’s leases include one or more options to renew and extend the lease term. The exercise of lease renewal options is at the Company’s sole discretion. Generally, a renewal option is not deemed to be reasonably certain to be exercised until such option is legally executed. The Company’s leases do not include purchase options or residual value guarantees on the leased property. The depreciable life of leasehold improvements is limited by the expected lease term. Substantially all of the Company’s leases are classified as operating leases and the associated assets and liabilities are presented as separate captions in the consolidated balance sheets. Finance lease assets are included in net property and equipment, and finance lease liabilities are included in long-term obligations, in the consolidated balance sheets. At February 3, 2023, the weighted-average remaining lease term for the Company’s leases was 9.6 years, and the weighted average discount rate was 3.9%. For 2022, 2021 and 2020, operating lease cost of $1.61 billion, $1.49 billion and $1.38 billion, respectively, and variable lease cost of $0.31 billion, $0.28 billion and $0.26 billion, respectively, were reflected as selling, general and administrative expenses in the consolidated statements of income. Cash paid for amounts included in the measurement of operating lease liabilities of $1.62 billion, $1.5 billion and $1.39 billion, respectively, were reflected in cash flows from operating activities in the consolidated statements of cash flows for 2022, 2021 and 2020. The scheduled maturity of the Company’s operating lease liabilities is as follows: (In thousands) 2023 $ 1,675,193 2024 1,619,954 2025 1,518,975 2026 1,396,714 2027 1,255,062 Thereafter 5,271,366 Total lease payments (a) 12,737,264 Less imputed interest (2,085,564) Present value of lease liabilities $ 10,651,700 a) Excludes approximately $481.0 million of legally binding minimum lease payments for leases signed which have not yet commenced . |
Current and long-term obligatio
Current and long-term obligations | 12 Months Ended |
Feb. 03, 2023 | |
Current and long-term obligations | |
Current and long-term obligations | 5. Current and long-term obligations Consolidated current and long-term obligations consist of the following: February 3, January 28, (In thousands) 2023 2022 Revolving Facility $ — $ — 364-Day Revolving Facility — — 3.250% Senior Notes due April 15, 2023 (net of discount of $0 and $319) — 899,681 4.250% Senior Notes due September 20, 2024 (net of discount of $563 and $0) 749,437 — 4.150% Senior Notes due November 1, 2025 (net of discount of $249 and $332) 499,751 499,668 3.875% Senior Notes due April 15, 2027 (net of discount of $207 and $251) 599,793 599,749 4.625% Senior Notes due November 1, 2027 (net of discount of $495 and $0) 549,505 — 4.125% Senior Notes due May 1, 2028 (net of discount of $287 and $336) 499,713 499,664 3.500% Senior Notes due April 3, 2030 (net of discount of $504 and $564) 952,440 988,990 5.000% Senior Notes due November 1, 2032 (net of discount of $2,346 and $0) 697,654 — 4.125% Senior Notes due April 3, 2050 (net of discount of $4,766 and $4,857) 495,234 495,143 5.500% Senior Notes due November 1, 2052 (net of discount of $292 and $0) 299,708 — Unsecured commercial paper notes 1,501,900 54,300 Other 200,695 159,525 Debt issuance costs, net (36,431) (24,652) Long-term obligations $ 7,009,399 $ 4,172,068 At February 3, 2023, the existing senior unsecured revolving credit facility (the “Revolving Facility”) had a commitment of $2.0 billion that provides for the issuance of letters of credit up to $100.0 million and is scheduled to mature on December 2, 2026. Borrowings under the Revolving Facility bear interest at a rate equal to an applicable interest rate margin plus, at the Company’s option, either (a) Adjusted Term SOFR (which is Term SOFR (as published by CME Group Benchmark Administration Limited) plus a credit spread adjustment of 0.10% or (b) a base rate (which is usually equal to the prime rate). The applicable interest rate margin for borrowings as of February 3, 2023 was 1.015% for Adjusted Term SOFR borrowings and 0.015% for base-rate borrowings. The Company is also required to pay a facility fee, payable on any used and unused commitment amounts of the Revolving Facility, and customary fees on letters of credit issued under the Revolving Facility. As of February 3, 2023, the facility fee rate was 0.11%. The applicable interest rate margins for borrowings, the facility fees and the letter of credit fees under the Revolving Facility are subject to adjustment from time to time based on the Company’s long-term senior unsecured debt ratings. The Company entered into a 364-day $750 million unsecured revolving credit facility (the “364-Day Revolving Facility”) on January 31, 2023, which will expire on January 30, 2024. At February 3, 2023, the 364-Day Revolving Facility had no outstanding borrowing. Borrowings under the 364-Day Revolving Facility bear interest at a rate equal to an applicable interest rate margin plus, at the Company’s option, either (a) Adjusted Term SOFR (which is Term SOFR (as published by CME Group Benchmark Administration Limited) plus a credit spread adjustment of 0.10% ) or (b) a base rate (which is usually equal to the prime rate). The Company is also required to pay a facility fee to the lenders under the 364-Day Revolving Facility for any used and unused commitments. As of February 3, 2023, the applicable interest rate margin for Adjusted Term SOFR loans was The Revolving Facility and the 364-Day Revolving Facility contain a number of customary affirmative and negative covenants that, among other things, restrict, subject to certain exceptions, the Company’s (and its subsidiaries’) ability to: incur additional liens; sell all or substantially all of the Company’s assets; consummate certain fundamental changes or change in the Company’s lines of business; and incur additional subsidiary indebtedness. The Revolving Facility and the 364-Day Revolving Facility also contain financial covenants which require the maintenance of a minimum fixed charge coverage ratio and a maximum leverage ratio. As of February 3, 2023, the Company was in compliance with all such covenants. Both facilities also contain customary events of default. As of February 3, 2023, the Company had no outstanding borrowings, no outstanding letters of credit, and borrowing availability of $2.0 billion under the Revolving Facility that, due to its intention to maintain borrowing availability related to the commercial paper program described below, could contribute liquidity of $0.3 billion. As of February 3, 2023, under the 364-Day Revolving Facility, the Company had no outstanding borrowings and borrowing availability of $750 million. At February 3, 2023, the Company had combined availability under the credit facilities of $1.0 billion. In addition, the Company had outstanding letters of credit of $39.7 million which were issued pursuant to separate agreements. As of February 3, 2023, the Company had a commercial paper program under which the Company may issue unsecured commercial paper notes (the “CP Notes”) from time to time in an aggregate amount not to exceed $2.0 billion outstanding at any time. The CP Notes may have maturities of up to 364 days from the date of issue and rank equal in right of payment with all of the Company’s other unsecured and unsubordinated indebtedness. The Company intends to maintain available commitments under the Revolving Facility in an amount at least equal to the amount of CP Notes outstanding at any time. As of February 3, 2023, the Company’s consolidated balance sheet reflected outstanding CP Notes of $1.5 billion. CP Notes totaling $230.8 million were held by a wholly-owned subsidiary of the Company and are therefore not reflected on the consolidated balance sheets. On September 20, 2022, the Company issued $750.0 million aggregate principal amount of 4.25% senior notes due 2024 (the “2024 Senior Notes”), net of discount of $0.7 million, $550.0 million aggregate principal amount of 4.625% senior notes due 2027 (the “November 2027 Senior Notes”), net of discount of $0.5 million, $700.0 million aggregate principal amount of 5.0% senior notes due 2032 (the “2032 Senior Notes”), net of discount of $2.4 million, and $300.0 million aggregate principal amount of 5.50% senior notes due 2052 (the “2052 Senior Notes”), net of discount of $0.3 million. The 2024 Senior Notes are scheduled to mature on September 20, 2024, the November 2027 Senior Notes are scheduled to mature on November 1, 2027, the 2032 Senior Notes are scheduled to mature on November 1, 2032 and the 2052 Senior Notes are scheduled to mature on November 1, 2052. Interest on the 2024 Senior Notes is payable in cash on March 20 and September 20 of each year, commencing on March 20, 2023. Interest on the November 2027 Senior Notes, the 2032 Senior Notes and the 2052 Senior Notes is payable in cash on May 1 and November 1 of each year, commencing on May 1, 2023. The Company incurred Collectively, the Company’s Senior Notes due 2024, 2025, April 2027, November 2027, 2028, 2030, 2032, 2050 and 2052 comprise the “Senior Notes”, each of which were issued pursuant to an indenture as supplemented and amended by supplemental indentures relating to each series of Senior Notes (as so supplemented and amended, the “Senior Indenture”). The Company may redeem some or all of its Senior Notes at any time at redemption prices set forth in the Senior Indenture. Upon the occurrence of a change of control triggering event, which is defined in the Senior Indenture, each holder of the Senior Notes has the right to require the Company to repurchase some or all of such holder’s Senior Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. The Senior Indenture contains covenants limiting, among other things, the ability of the Company and its subsidiaries to (subject to certain exceptions): consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s assets; and to incur or guarantee indebtedness secured by liens on any shares of voting stock of significant subsidiaries. The Senior Indenture also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the Senior Notes to become or to be declared due and payable, as applicable. During the second quarter of 2021, the Company entered into interest rate swaps on a portion of the 2030 Senior Notes. These interest rate swaps are being accounted for as fair value hedges, with the derivative asset or liability offset by a corresponding adjustment to the carrying value of the 2030 Senior Notes. Such arrangements are not material to the Company’s consolidated financial statements. Scheduled debt maturities at February 3, 2023 for the Company’s fiscal years listed below are as follows (in thousands): 2023 - $1,516,478; 2024 - $764,355; 2025 - $514,524; 2026 - $14,378; 2027 - $1,164,532; thereafter - $3,128,329. |
Assets and liabilities measured
Assets and liabilities measured at fair value | 12 Months Ended |
Feb. 03, 2023 | |
Assets and liabilities measured at fair value | |
Assets and liabilities measured at fair value | 6. Assets and liabilities measured at fair value The following table presents the Company’s assets and liabilities required to be measured at fair value as of February 3, 2023, aggregated by the level in the fair value hierarchy within which those measurements are classified. Quoted Prices in Active Markets Significant for Identical Other Significant Total Fair Assets and Observable Unobservable Value at Liabilities Inputs Inputs February 3, (In thousands) (Level 1) (Level 2) (Level 3) 2023 Liabilities: Long-term obligations (a) $ 5,223,916 $ 1,702,595 $ — $ 6,926,511 Deferred compensation (b) 45,794 — — 45,794 (a) Included in the consolidated balance sheet at book value as Long-term obligations of $7,009,399 . (b) Reflected at fair value in the consolidated balance sheet as a component of Accrued expenses and other current liabilities of $6,879 and a component of noncurrent Other liabilities of $38,915 . The carrying amounts reflected in the consolidated balance sheets for cash, cash equivalents, short-term investments, receivables and payables approximate their respective fair values. The Company does not have any recurring fair value measurements using significant unobservable inputs (Level 3) as of February 3, 2023. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Feb. 03, 2023 | |
Commitments and contingencies | |
Commitments and contingencies | 7. Commitments and contingencies Legal proceedings From time to time, the Company is a party to various legal matters in the ordinary course of its business, including actions by employees, consumers, suppliers, government agencies, or others. The Company has recorded accruals with respect to these matters, where appropriate, which are reflected in the Company’s consolidated financial statements. For some matters, a liability is not probable or the amount cannot be reasonably estimated and therefore an accrual has not been made. On January 20, 2023, a lawsuit entitled Brent Conforti, et al. v. Jeffrey C. Owen, et al Conforti Conforti Based on information currently available, the Company believes that its pending legal matters, both individually and in the aggregate, will be resolved without a material adverse effect on the Company’s consolidated financial statements as a whole. However, litigation and other legal matters involve an element of uncertainty. Adverse decisions and settlements, including any required changes to the Company’s business, or other developments in such matters could affect the consolidated operating results in future periods or result in liability or other amounts material to the Company’s annual consolidated financial statements. |
Benefit plans
Benefit plans | 12 Months Ended |
Feb. 03, 2023 | |
Benefit plans | |
Benefit plans | 8. Benefit plans The Dollar General Corporation 401(k) Savings and Retirement Plan, which became effective on January 1, 1998, is a safe harbor defined contribution plan and is subject to the Employee Retirement and Income Security Act (“ERISA”). A participant’s right to claim a distribution of his or her account balance is dependent on the plan, ERISA guidelines and Internal Revenue Service regulations. All active participants are fully vested in all contributions to the 401(k) plan. During 2022, 2021 and 2020, the Company expensed approximately $35.7 million, $34.0 million and $30.1 million, respectively, for matching contributions. The Company also has a compensation deferral plan (“CDP”) and a nonqualified supplemental retirement plan (“SERP”), known as the Dollar General Corporation CDP/SERP Plan, for a select group of management and other key employees. The Company incurred compensation expense for these plans of approximately $1.2 million in 2022, $1.3 million in 2021 and $0.9 million in 2020. The deferred compensation liability associated with the CDP/SERP Plan is reflected in the consolidated balance sheets as further disclosed in Note 6. |
Share-based payments
Share-based payments | 12 Months Ended |
Feb. 03, 2023 | |
Share-based payments | |
Share-based payments | 9. Share-based payments The Company accounts for share-based payments in accordance with applicable accounting standards, under which the fair value of each award is separately estimated and amortized into compensation expense over the service period. The fair value of the Company’s stock option grants are estimated on the grant date using the Black-Scholes-Merton valuation model. The application of this valuation model involves assumptions that are judgmental and highly sensitive in the determination of compensation expense. The fair value of the Company’s other share-based awards discussed below are estimated using the Company’s closing stock price on the grant date. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. On May 26, 2021, the Company’s shareholders approved the Dollar General Corporation 2021 Stock Incentive Plan (“2021 Plan”), which replaced the Company’s 2007 Stock Incentive Plan (“2007 Plan”). The Plans allow the granting of stock options, stock appreciation rights, and other stock-based awards or dividend equivalent rights to key employees, directors, consultants or other persons having a service relationship with the Company, its subsidiaries and certain of its affiliates. Upon the effective date of the 2021 Plan, no new awards may be granted under the 2007 Plan. Awards previously granted under the 2007 Plan remain outstanding in accordance with their terms. The number of shares of Company common stock authorized for grant under the 2021 Plan is 11,838,143. Generally, share-based awards issued by the Company are in the form of stock options, restricted stock units and performance share units, and unless noted otherwise, the disclosures that follow refer to such awards. With limited exceptions, stock options and restricted stock units granted to employees generally vest ratably on an annual basis over four-year and three-year periods, respectively. Awards granted to board members generally vest over a one The weighted average for key assumptions used in determining the fair value of all stock options granted in the years ended February 3, 2023, January 28, 2022, and January 29, 2021, and a summary of the methodology applied to develop each assumption, are as follows: February 3, January 28, January 29, 2023 2022 2021 Expected dividend yield 1.0 % 0.9 % 0.9 % Expected stock price volatility 25.4 % 26.5 % 26.4 % Weighted average risk-free interest rate 2.4 % 0.8 % 0.7 % Expected term of options (years) 4.8 4.9 5.2 Expected dividend yield - This is an estimate of the expected dividend yield on the Company’s stock. An increase in the dividend yield will decrease compensation expense. Expected stock price volatility - This is a measure of the amount by which the price of the Company’s common stock has fluctuated or is expected to fluctuate, calculated based upon historical volatility. An increase in the expected volatility will increase compensation expense. Weighted average risk-free interest rate - This is the U.S. Treasury rate for the week of the grant having a term approximating the expected life of the option. An increase in the risk-free interest rate will increase compensation expense. Expected term of options - This is the period of time over which the options granted are expected to remain outstanding. An increase in the expected term will increase compensation expense. A summary of the Company’s stock option activity during the year ended February 3, 2023 is as follows: Average Remaining Options Exercise Contractual Intrinsic (Intrinsic value amounts reflected in thousands) Issued Price Term in Years Value Balance, January 28, 2022 2,347,510 $ 133.62 Granted 813,165 219.82 Exercised (514,264) 115.84 Canceled or expired (124,115) 183.61 Balance, February 3, 2023 2,522,296 $ 162.58 7.1 $ 168,452 Exercisable at February 3, 2023 973,457 $ 110.74 5.2 $ 114,248 The weighted average grant date fair value per share of options granted was $52.06, $42.89 and $34.60 during 2022, 2021 and 2020, respectively. The intrinsic value of options exercised during 2022, 2021 and 2020, was $62.7 million, $132.3 million and $116.1 million, respectively. The number of performance share unit awards earned is based upon the Company’s financial performance as specified in the award agreement. A summary of performance share unit award activity during the year ended February 3, 2023 is as follows: Units Intrinsic (Intrinsic value amounts reflected in thousands) Issued Value Balance, January 28, 2022 337,243 Granted 169,657 Converted to common stock (184,603) Canceled (7,400) Balance, February 3, 2023 314,897 $ 71,825 All performance share unit awards at February 3, 2023 are unvested, and the number of such awards which will ultimately vest will be based in part on the Company’s financial performance in future years. The weighted average grant date fair value per share of performance share units granted was $214.25, $193.55 and $154.53 during 2022, 2021 and 2020, respectively. A summary of restricted stock unit award activity during the year ended February 3, 2023 is as follows: Units Intrinsic (Intrinsic value amounts reflected in thousands) Issued Value Balance, January 28, 2022 307,118 Granted 222,420 Converted to common stock (146,834) Canceled (45,455) Balance, February 3, 2023 337,249 $ 76,923 The weighted average grant date fair value per share of restricted stock units granted was $223.51, $193.76 and $155.73 during 2022, 2021 and 2020, respectively. At February 3, 2023, the total unrecognized compensation cost related to unvested stock-based awards was $119.6 million with an expected weighted average expense recognition period of 2.1 years. The fair value method of accounting for share-based awards resulted in share-based compensation expense (a component of SG&A expenses) and a corresponding reduction in income before and net of income taxes as follows: Stock Performance Restricted (In thousands) Options Share Units Stock Units Total Year ended February 3, 2023 Pre-tax $ 20,502 $ 26,920 $ 25,249 $ 72,671 Net of tax $ 15,893 $ 20,868 $ 19,573 $ 56,334 Year ended January 28, 2022 Pre-tax $ 21,452 $ 33,234 $ 23,492 $ 78,178 Net of tax $ 15,853 $ 24,560 $ 17,361 $ 57,774 Year ended January 29, 2021 Pre-tax $ 19,933 $ 27,388 $ 21,288 $ 68,609 Net of tax $ 14,730 $ 20,240 $ 15,732 $ 50,702 |
Segment reporting
Segment reporting | 12 Months Ended |
Feb. 03, 2023 | |
Segment reporting | |
Segment reporting | 10. Segment reporting The Company manages its business on the basis of one reportable operating segment. See Note 1 for a brief description of the Company’s business. As of February 3, 2023, all of the Company’s retail store operations were located within the United States. Certain product sourcing and other operations are located outside the United States, which collectively are not material with regard to assets, results of operations or otherwise to the consolidated financial statements. The following net sales data is presented in accordance with accounting standards related to disclosures about segments of an enterprise. (in thousands) 2022 2021 2020 Classes of similar products: Consumables $ 30,155,218 $ 26,258,605 $ 25,906,685 Seasonal 4,182,815 4,182,165 4,083,650 Home products 2,332,411 2,322,367 2,209,950 Apparel 1,174,419 1,457,312 1,546,554 Net sales $ 37,844,863 $ 34,220,449 $ 33,746,839 |
Common stock transactions
Common stock transactions | 12 Months Ended |
Feb. 03, 2023 | |
Common stock transactions | |
Common stock transactions | 11. Common stock transactions On August 29, 2012, the Company’s Board of Directors authorized a common stock repurchase program, which the Board has since increased on several occasions. On August 24, 2022, the Company’s Board of Directors authorized a $2.0 billion increase to the existing common stock repurchase program, bringing the cumulative total authorized under the program since its inception to $16.0 billion. The repurchase authorization has no expiration date and allows repurchases from time to time in open market transactions, including pursuant to trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, or in privately negotiated transactions. The timing, manner and number of shares repurchased will depend on a variety of factors, including price, market conditions, compliance with the covenants and restrictions under the Company’s debt agreements and other factors. Repurchases under the program may be funded from available cash or borrowings including under the Company’s Revolving Facility, 364-Day Revolving Facility and issuance of CP Notes discussed in further detail in Note 5. During the years ended February 3, 2023, January 28, 2022, and January 29, 2021, the Company repurchased approximately 11.6 million shares of its common stock at a total cost of $2.7 billion, approximately 12.1 million shares of its common stock at a total cost of $2.5 billion, and approximately 12.3 million shares of its common stock at a total cost of $2.5 billion, respectively, pursuant to its common stock repurchase program. The Company paid quarterly cash dividends of $0.55 per share in 2022. In March 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.59 per share, which is payable on or before April 25, 2023 to shareholders of record on April 11, 2023. The amount and declaration of future cash dividends is subject to the sole discretion of the Company’s Board of Directors and will depend upon, among other things, the Company’s results of operations, cash requirements, financial condition, contractual restrictions and other factors that the Board may deem relevant in its sole discretion. |
Basis of presentation and acc_2
Basis of presentation and accounting policies (Policies) | 12 Months Ended |
Feb. 03, 2023 | |
Accounting policies | |
Basis of presentation | Basis of presentation These notes contain references to the years 2022, 2021, and 2020, which represent fiscal years ended February 3, 2023, January 28, 2022, and January 29, 2021, respectively. The Company’s 2022 accounting period was comprised of 53 weeks, and the 2021 and 2020 accounting periods were each comprised of 52 weeks. The Company’s fiscal year ends on the Friday closest to January 31. The consolidated financial statements include all subsidiaries of the Company, except for its not-for-profit subsidiary which the Company does not control. Intercompany transactions have been eliminated. The Company sells general merchandise on a retail basis through 19,104 stores (as of February 3, 2023) in 47 states with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States. As of February 3, 2023, the Company operated 19 distribution centers for non-refrigerated products, ten cold storage distribution centers, and two combination distribution centers which have both refrigerated and non-refrigerated products. The Company leases 14 of these facilities and the remainder are owned. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include highly liquid investments with insignificant interest rate risk and original maturities of three months or less when purchased. Such investments primarily consist of money market funds, bank deposits, certificates of deposit, and commercial paper. The carrying amounts of these items are a reasonable estimate of their fair value due to the short maturity of these investments. Payments due from processors for electronic tender transactions classified as cash and cash equivalents totaled approximately $157.3 million and $133.9 million at February 3, 2023 and January 28, 2022, respectively. |
Investments in debt and equity securities | Investments in debt and equity securities The Company accounts for investments in debt and marketable equity securities as held-to-maturity, available-for-sale, or trading, depending on their classification. Debt securities categorized as held-to-maturity are stated at amortized cost. Debt and equity securities categorized as available-for-sale are stated at fair value, with any unrealized gains and losses, net of deferred income taxes, reported as a component of Accumulated other comprehensive loss. Trading securities are stated at fair value, with changes in fair value recorded as a component of Selling, general and administrative (“SG&A”) expense. The cost of securities sold is based upon the specific identification method. |
Merchandise inventories | Merchandise inventories Inventories are stated at the lower of cost or market (“LCM”) with cost determined using the retail last-in, first-out (“LIFO”) method as this method results in a better matching of costs and revenues. Under the Company’s retail inventory method (“RIM”), the calculation of gross profit and the resulting valuation of inventories at cost are computed by applying a calculated cost-to-retail inventory ratio to the retail value of sales at a department level. The use of the RIM will result in valuing inventories at LCM if markdowns are currently taken as a reduction of the retail value of inventories. Costs directly associated with warehousing and distribution are capitalized into inventory. The excess of current cost over LIFO cost was approximately $813.6 million and $296.3 million at February 3, 2023 and January 28, 2022, respectively. Current cost is determined using the RIM on a first-in, first-out basis. Under the LIFO inventory method, the impacts of rising or falling market price changes increase or decrease cost of sales (the LIFO provision or benefit). The Company recorded a LIFO provision of $517.3 million in 2022, $180.4 million in 2021, and $5.1 million in 2020, which is included in cost of goods sold in the consolidated statements of income. The Company purchases its merchandise from a wide variety of suppliers. The Company’s two largest suppliers accounted for approximately 10% and 8%, respectively, of the Company’s purchases in 2022. |
Vendor rebates | Vendor rebates The Company accounts for all cash consideration received from vendors in accordance with applicable accounting standards pertaining to such arrangements. Cash consideration received from a vendor is generally presumed to be a rebate or an allowance and is accounted for as a reduction of merchandise purchase costs as earned. However, certain specific, incremental and otherwise qualifying SG&A expenses related to the promotion or sale of vendor products may be offset by cash consideration received from vendors, in accordance with arrangements such as cooperative advertising, when earned for dollar amounts up to but not exceeding actual incremental costs. |
Property and equipment | Property and equipment Property and equipment acquired is recorded at cost. The Company records depreciation and amortization on a straight-line basis over the assets’ estimated useful lives. Amounts included in the Company’s property and equipment balances and their estimated lives are summarized as follows: February 3, January 28, (In thousands) Life 2023 2022 Land Indefinite $ 230,814 $ 227,085 Land improvements 20 98,567 96,402 Buildings 39 - 40 1,561,440 1,446,126 Leasehold improvements (a) 1,011,788 889,782 Furniture, fixtures and equipment 3 - 10 5,714,456 4,984,534 Construction in progress 313,615 131,073 Right of use assets - finance leases Various 215,052 162,772 9,145,732 7,937,774 Less accumulated depreciation and amortization (3,909,423) (3,591,647) Net property and equipment $ 5,236,309 $ 4,346,127 (a) Depreciated over the lesser of the life of the applicable lease term or the estimated useful life of the asset. Depreciation and amortization expense related to property and equipment was approximately $717.8 million, $635.9 million and $569.3 million for 2022, 2021 and 2020, respectively. Interest on borrowed funds during the construction of property and equipment is capitalized where applicable. Interest costs of $4.8 million, $1.2 million, and less than $0.1 million were capitalized in 2022, 2021 and 2020, respectively. |
Impairment of long-lived assets | Impairment of long-lived assets When indicators of impairment are present, the Company evaluates the carrying value of long-lived assets, excluding goodwill and other indefinite-lived intangible assets, in relation to the operating performance and future cash flows or the appraised values of the underlying assets. Generally, the Company’s policy is to review for impairment stores open more than three years for which current cash flows from operations are negative. Impairment results when the carrying value of the assets exceeds the undiscounted future cash flows expected to be generated by the assets. The Company’s estimate of undiscounted future cash flows is based upon historical operations of the stores and estimates of future store profitability which encompasses many factors that are subject to variability and difficult to predict. If a long-lived asset is found to be impaired, the amount recognized for impairment is equal to the difference between the carrying value and the asset’s estimated fair value. The fair value is estimated based primarily upon estimated future cash flows over the asset’s remaining useful life (discounted at the Company’s credit adjusted risk-free rate) or other reasonable estimates of fair market value. Assets to be disposed of are adjusted to the fair value less the cost to sell if less than the book value. The Company recorded impairment charges included in SG&A expense of approximately $2.1 million in 2022, $2.6 million in 2021 and $2.7 million in 2020, to reduce the carrying value of certain of its stores’ assets. Such action was deemed necessary based on the Company’s evaluation that such amounts would not be recoverable primarily due to insufficient sales or excessive costs resulting in the carrying value of the assets exceeding the estimated undiscounted future cash flows generated by the assets at these locations. |
Goodwill and other intangible assets | Goodwill and other intangible assets If not deemed indefinite, the Company amortizes intangible assets over their estimated useful lives. Goodwill and intangible assets with indefinite lives are tested for impairment annually or more frequently if indicators of impairment are present. Definite lived intangible assets are tested for impairment if indicators of impairment are present. Impaired assets are written down to fair value as required. No impairment of intangible assets has been identified during any of the periods presented. In accordance with accounting standards for goodwill and indefinite-lived intangible assets, an entity has the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that goodwill or an indefinite-lived intangible asset is impaired. If after such assessment an entity concludes that the asset is not impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the asset using a quantitative impairment test. 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 quantitative goodwill impairment test requires management to make judgments in determining what assumptions to use in the calculation. 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. The quantitative impairment test for intangible assets compares the fair value of the intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company’s goodwill balance has an indefinite life and is not expected to be deductible for income tax purposes. Substantially all of the Company’s other intangible assets are its trade names and trademarks which have an indefinite life. |
Insurance liabilities | Insurance liabilities The Company retains a significant portion of risk for its workers’ compensation, employee health, general liability, property, automobile, and certain third-party landlord general liability claim exposures. Accordingly, provisions are made for the Company’s estimates of such risks which are recorded as self-insurance reserves pursuant to Company policy. The undiscounted future claim costs for the workers’ compensation, general liability, landlord liability, and health claim risks are derived using actuarial methods which are sensitive to significant assumptions such as loss development factors, trend factors, pure loss rates, and projected claim counts. To the extent that subsequent claim costs vary from the Company’s estimates, future results of operations will be affected as the reserves are adjusted. Ashley River Insurance Company (“ARIC”), a Tennessee-based wholly owned captive insurance subsidiary of the Company, charges the operating subsidiary companies premiums to insure the retained workers’ compensation, medical stop-loss, and non-property general liability exposures. Pursuant to Tennessee insurance regulations, ARIC maintains certain levels of cash and cash equivalents related to its self-insured exposures. |
Leases | Leases The Company records operating lease right of use assets and liabilities on its balance sheet. Lease liabilities are recorded at a discount based upon the Company’s estimated collateralized incremental borrowing rate. 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. The Company records single lease cost on a straight-line basis over the base, non-cancelable lease term commencing on the date that the Company takes physical possession of the property from the landlord, which may include a period prior to the opening of a store or other facility to make any necessary leasehold improvements and install fixtures. Any tenant allowances received are recorded as a reduction of the right of use asset. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense for such leases is recognized on a straight-line basis over the lease term. The Company combines lease and nonlease components. Many leases include one or more options to renew, and the exercise of lease renewal options is at the Company’s sole discretion. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. |
Fair value accounting | Fair value accounting The Company utilizes accounting standards for fair value, which include the definition of fair value, the framework for measuring fair value, and disclosures about fair value measurements. Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, fair value accounting standards establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are directly or indirectly observable for the asset or liability. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are based on an entity’s own assumptions, as there is little, if any, observable market activity. In instances where the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. |
Other comprehensive income | Other comprehensive income The Company previously recorded a loss on the settlement of derivatives associated with the issuance of long-term debt in 2013 which was deferred to other comprehensive income and is being amortized as an increase to interest expense over the 10-year |
Revenue recognition | Revenue recognition The Company recognizes retail sales in its stores at the time the customer takes possession of merchandise. All sales are net of discounts and are presented net of taxes assessed by governmental authorities that are imposed concurrent with those sales. The Company recognizes gift card sales revenue at the time of redemption. The liability for gift cards is established for the cash value at the time of purchase of the gift card. The liability for outstanding gift cards was approximately $10.7 million and $9.7 million at February 3, 2023 and January 28, 2022, respectively, and is recorded in Accrued expenses and other liabilities. Estimated breakage revenue, a percentage of gift cards that will never be redeemed based on historical redemption rates, is recognized over time in proportion to actual gift card redemptions. The Company recorded breakage revenue of $2.3 million, $1.7 million and $1.3 million in 2022, 2021 and 2020, respectively. |
Advertising costs | Advertising costs Advertising costs are expensed upon performance, “first showing” or distribution, and are reflected in SG&A expenses net of earned cooperative advertising amounts provided by vendors which are specific, incremental and otherwise qualifying expenses related to the promotion or sale of vendor products for dollar amounts up to but not exceeding actual incremental costs. Advertising costs were $126.0 million, $117.2 million and $107.4 million in 2022, 2021 and 2020, respectively. These costs primarily include promotional circulars, targeted circulars supporting new stores, television and radio advertising, and in-store signage. Vendor funding for cooperative advertising offset reported expenses by $33.4 million, $34.3 million and $33.4 million in 2022, 2021 and 2020, respectively. |
Share-based payments | Share-based payments The Company recognizes compensation expense for share-based compensation based on the fair value of the awards on the grant date. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. This estimate may be adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the prior estimate. The forfeiture rate is the estimated percentage of share-based awards granted that are expected to be forfeited or canceled before becoming fully vested. The Company bases this estimate on historical experience or estimates of future trends, as applicable. An increase in the forfeiture rate will decrease compensation expense. The fair value of each option grant is separately estimated and amortized into compensation expense on a straight-line basis between the applicable grant date and each vesting date. The Company has estimated the fair value of all stock option awards as of the grant date by applying the Black-Scholes-Merton option pricing valuation model. The application of this valuation model involves assumptions that are judgmental and highly sensitive to variation in the determination of compensation expense. The Company calculates compensation expense for restricted stock, share units and similar awards as the difference between the market price of the underlying stock or similar award on the grant date and the purchase price, if any. Such expense is recognized on a straight-line basis for time-based awards and on an accelerated or straight-line basis for performance awards depending on the period over which the recipient earns the awards. |
Store pre-opening costs | Store pre-opening costs Pre-opening costs related to new store openings and the related construction periods are expensed as incurred. |
Income taxes | Income taxes Under the accounting standards for income taxes, the asset and liability method is used for computing the future income tax consequences of events that have been recognized in the Company’s consolidated financial statements or income tax returns. Deferred income tax expense or benefit is the net change during the year in the Company’s deferred income tax assets and liabilities. The Company includes income tax related interest and penalties as a component of the provision for income tax expense. Income tax reserves are determined using a methodology which requires companies to assess each income tax position taken using a two-step process. A determination is first made as to whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the respective tax position. Uncertain tax positions require determinations and estimated liabilities to be made based on provisions of the tax law which may be subject to change or varying interpretation. If the Company’s determinations and estimates prove to be inaccurate, the resulting adjustments could be material to the Company’s future financial results. |
Management estimates | Management estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Accounting standards | Accounting standards In March 2020 and January 2021, the Financial Accounting Standards Board (“FASB”) issued accounting standards updates pertaining to reference rate reform. This collective guidance is in response to accounting concerns regarding contract modifications and hedge accounting because of impending rate reform associated with structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of LIBOR, related to regulators in several jurisdictions around the world having undertaken reference rate reform initiatives to identify alternative reference rates. The guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The adoption of this guidance is effective for all entities as of March 12, 2020 through December 31, 2024. The Company does not expect the adoption of this guidance to have a material impact on its consolidated results of operations, financial position or cash flows. In September 2022, the FASB issued new required disclosures for supplier finance programs. This is intended to enhance the transparency about the use of supplier finance programs for investors. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with the exception of the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The amendments should be applied retrospectively to each period in which a balance sheet is presented, except for disclosure of rollforward information, which should be applied prospectively. The Company does not expect the adoption of this guidance to have a material impact on its consolidated results of operations, financial position or cash flows. |
Basis of presentation and acc_3
Basis of presentation and accounting policies (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Basis of presentation and accounting policies | |
Schedule of property and equipment balances and depreciable lives | February 3, January 28, (In thousands) Life 2023 2022 Land Indefinite $ 230,814 $ 227,085 Land improvements 20 98,567 96,402 Buildings 39 - 40 1,561,440 1,446,126 Leasehold improvements (a) 1,011,788 889,782 Furniture, fixtures and equipment 3 - 10 5,714,456 4,984,534 Construction in progress 313,615 131,073 Right of use assets - finance leases Various 215,052 162,772 9,145,732 7,937,774 Less accumulated depreciation and amortization (3,909,423) (3,591,647) Net property and equipment $ 5,236,309 $ 4,346,127 (a) Depreciated over the lesser of the life of the applicable lease term or the estimated useful life of the asset. |
Schedule of accrued expenses and other liabilities | February 3, January 28, (In thousands) 2023 2022 Compensation and benefits $ 214,472 $ 215,355 Self-insurance reserves 136,911 127,719 Taxes (other than taxes on income) 296,343 324,438 Other 389,193 381,627 $ 1,036,919 $ 1,049,139 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Earnings per share | |
Schedule of computation of earnings per share | Earnings per share is computed as follows (in thousands except per share data): 2022 Weighted Net Average Per Share Income Shares Amount Basic earnings per share $ 2,415,989 225,148 $ 10.73 Effect of dilutive share-based awards 1,149 Diluted earnings per share $ 2,415,989 226,297 $ 10.68 2021 Weighted Net Average Per Share Income Shares Amount Basic earnings per share $ 2,399,232 234,261 $ 10.24 Effect of dilutive share-based awards 1,551 Diluted earnings per share $ 2,399,232 235,812 $ 10.17 2020 Weighted Net Average Per Share Income Shares Amount Basic earnings per share $ 2,655,050 248,171 $ 10.70 Effect of dilutive share-based awards 1,905 Diluted earnings per share $ 2,655,050 250,076 $ 10.62 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Income taxes | |
Schedule of provision (benefit) for income taxes | (In thousands) 2022 2021 2020 Current: Federal $ 400,752 $ 472,913 $ 614,207 Foreign 279 384 127 State 63,562 76,261 100,002 464,593 549,558 714,336 Deferred: Federal 195,529 93,114 32,433 Foreign (24) (38) (104) State 40,527 21,283 2,665 236,032 114,359 34,994 $ 700,625 $ 663,917 $ 749,330 |
Schedule of reconciliation between actual income taxes and amounts computed by applying the federal statutory rate to income before income taxes | (Dollars in thousands) 2022 2021 2020 U.S. federal statutory rate on earnings before income taxes $ 654,489 21.0 % $ 643,262 21.0 % $ 714,920 21.0 % State income taxes, net of federal income tax benefit 82,134 2.6 77,086 2.5 81,117 2.4 Jobs credits, net of federal income taxes (37,639) (1.2) (39,936) (1.3) (27,479) (0.8) Other, net 1,641 0.1 (16,495) (0.5) (19,228) (0.6) $ 700,625 22.5 % $ 663,917 21.7 % $ 749,330 22.0 % |
Schedule of deferred tax assets and liabilities | February 3, January 28, (In thousands) 2023 2022 Deferred tax assets: Deferred compensation expense $ 12,029 $ 11,563 Accrued expenses 7,274 26,984 Accrued rent 473 552 Lease liabilities 2,760,588 2,617,954 Accrued insurance 7,514 6,971 Accrued incentive compensation 26,534 30,716 Share based compensation 15,309 16,605 Interest rate hedges 31 383 Tax benefit of income tax and interest reserves related to uncertain tax positions 77 79 State and foreign tax net operating loss carry forwards, net of federal tax 4,279 903 State tax credit carry forwards, net of federal tax 7,812 6,973 Other 22,756 16,715 2,864,676 2,736,398 Less valuation allowances, net of federal income taxes (9,001) (5,235) Total deferred tax assets 2,855,675 2,731,163 Deferred tax liabilities: Property and equipment (684,468) (572,286) Lease assets (2,728,507) (2,588,709) Inventories (176,798) (68,780) Trademarks (307,734) (310,011) Prepaid insurance (17,870) (15,278) Other (1,204) (1,353) Total deferred tax liabilities (3,916,581) (3,556,417) Net deferred tax liabilities $ (1,060,906) $ (825,254) |
Schedule of amounts associated with uncertain tax positions included in income tax expense | (In thousands) 2022 2021 2020 Income tax expense (benefit) $ 1,797 $ (1,311) $ 2,411 Income tax related interest expense (benefit) 28 (281) 104 Income tax related penalty expense (benefit) — — — |
Schedule of reconciliation of uncertain income tax positions | (In thousands) 2022 2021 2020 Beginning balance $ 6,191 $ 7,502 $ 5,090 Increases—tax positions taken in the current year — — — Increases—tax positions taken in prior years 3,499 2,803 3,857 Decreases—tax positions taken in prior years — — (1,445) Statute expirations (1,239) (1,456) — Settlements (463) (2,658) — Ending balance $ 7,988 $ 6,191 $ 7,502 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Leases | |
Schedule of operating lease liabilities maturity | (In thousands) 2023 $ 1,675,193 2024 1,619,954 2025 1,518,975 2026 1,396,714 2027 1,255,062 Thereafter 5,271,366 Total lease payments (a) 12,737,264 Less imputed interest (2,085,564) Present value of lease liabilities $ 10,651,700 a) Excludes approximately $481.0 million of legally binding minimum lease payments for leases signed which have not yet commenced . |
Current and long-term obligat_2
Current and long-term obligations (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Current and long-term obligations | |
Schedule of current and long-term debt obligations | February 3, January 28, (In thousands) 2023 2022 Revolving Facility $ — $ — 364-Day Revolving Facility — — 3.250% Senior Notes due April 15, 2023 (net of discount of $0 and $319) — 899,681 4.250% Senior Notes due September 20, 2024 (net of discount of $563 and $0) 749,437 — 4.150% Senior Notes due November 1, 2025 (net of discount of $249 and $332) 499,751 499,668 3.875% Senior Notes due April 15, 2027 (net of discount of $207 and $251) 599,793 599,749 4.625% Senior Notes due November 1, 2027 (net of discount of $495 and $0) 549,505 — 4.125% Senior Notes due May 1, 2028 (net of discount of $287 and $336) 499,713 499,664 3.500% Senior Notes due April 3, 2030 (net of discount of $504 and $564) 952,440 988,990 5.000% Senior Notes due November 1, 2032 (net of discount of $2,346 and $0) 697,654 — 4.125% Senior Notes due April 3, 2050 (net of discount of $4,766 and $4,857) 495,234 495,143 5.500% Senior Notes due November 1, 2052 (net of discount of $292 and $0) 299,708 — Unsecured commercial paper notes 1,501,900 54,300 Other 200,695 159,525 Debt issuance costs, net (36,431) (24,652) Long-term obligations $ 7,009,399 $ 4,172,068 |
Assets and liabilities measur_2
Assets and liabilities measured at fair value (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Assets and liabilities measured at fair value | |
Schedule of assets and liabilities measured at fair value | Quoted Prices in Active Markets Significant for Identical Other Significant Total Fair Assets and Observable Unobservable Value at Liabilities Inputs Inputs February 3, (In thousands) (Level 1) (Level 2) (Level 3) 2023 Liabilities: Long-term obligations (a) $ 5,223,916 $ 1,702,595 $ — $ 6,926,511 Deferred compensation (b) 45,794 — — 45,794 (a) Included in the consolidated balance sheet at book value as Long-term obligations of $7,009,399 . (b) Reflected at fair value in the consolidated balance sheet as a component of Accrued expenses and other current liabilities of $6,879 and a component of noncurrent Other liabilities of $38,915 . |
Share-based payments (Tables)
Share-based payments (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Share-based payments | |
Schedule of weighted averages for key assumptions used in determining the fair value of all stock option grants | February 3, January 28, January 29, 2023 2022 2021 Expected dividend yield 1.0 % 0.9 % 0.9 % Expected stock price volatility 25.4 % 26.5 % 26.4 % Weighted average risk-free interest rate 2.4 % 0.8 % 0.7 % Expected term of options (years) 4.8 4.9 5.2 |
Schedule of options activity | Average Remaining Options Exercise Contractual Intrinsic (Intrinsic value amounts reflected in thousands) Issued Price Term in Years Value Balance, January 28, 2022 2,347,510 $ 133.62 Granted 813,165 219.82 Exercised (514,264) 115.84 Canceled or expired (124,115) 183.61 Balance, February 3, 2023 2,522,296 $ 162.58 7.1 $ 168,452 Exercisable at February 3, 2023 973,457 $ 110.74 5.2 $ 114,248 |
Schedule of performance share unit award activity | Units Intrinsic (Intrinsic value amounts reflected in thousands) Issued Value Balance, January 28, 2022 337,243 Granted 169,657 Converted to common stock (184,603) Canceled (7,400) Balance, February 3, 2023 314,897 $ 71,825 |
Schedule of restricted stock unit award activity | Units Intrinsic (Intrinsic value amounts reflected in thousands) Issued Value Balance, January 28, 2022 307,118 Granted 222,420 Converted to common stock (146,834) Canceled (45,455) Balance, February 3, 2023 337,249 $ 76,923 |
Schedule of share-based compensation expense | Stock Performance Restricted (In thousands) Options Share Units Stock Units Total Year ended February 3, 2023 Pre-tax $ 20,502 $ 26,920 $ 25,249 $ 72,671 Net of tax $ 15,893 $ 20,868 $ 19,573 $ 56,334 Year ended January 28, 2022 Pre-tax $ 21,452 $ 33,234 $ 23,492 $ 78,178 Net of tax $ 15,853 $ 24,560 $ 17,361 $ 57,774 Year ended January 29, 2021 Pre-tax $ 19,933 $ 27,388 $ 21,288 $ 68,609 Net of tax $ 14,730 $ 20,240 $ 15,732 $ 50,702 |
Segment reporting (Tables)
Segment reporting (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Segment reporting | |
Schedule of net sales grouped by classes of similar products | (in thousands) 2022 2021 2020 Classes of similar products: Consumables $ 30,155,218 $ 26,258,605 $ 25,906,685 Seasonal 4,182,815 4,182,165 4,083,650 Home products 2,332,411 2,322,367 2,209,950 Apparel 1,174,419 1,457,312 1,546,554 Net sales $ 37,844,863 $ 34,220,449 $ 33,746,839 |
Basis of presentation and acc_4
Basis of presentation and accounting policies (Details) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 USD ($) Center state store period | Jan. 28, 2022 USD ($) period | Jan. 29, 2021 USD ($) period | |
Fiscal year, number of weeks | period | 53 | 52 | 52 |
Number of stores through which entity sells general merchandise on a retail basis | store | 19,104 | ||
Number of states which entity covers | state | 47 | ||
Number of distribution centers leased | 14 | ||
Cash and cash equivalents | |||
Maximum original maturity period at time of purchase of liquid investments classified as cash equivalents | 3 months | ||
Payments due from processors for electronic tender transactions classified as cash and cash equivalents | $ | $ 157.3 | $ 133.9 | |
Merchandise inventories | |||
Excess of current cost over LIFO cost | $ | 813.6 | 296.3 | |
LIFO provision | $ | $ 517.3 | $ 180.4 | $ 5.1 |
Non Refrigerated Merchandise Distribution Centers | |||
Number of distribution centers | 19 | ||
Cold Storage And Distribution Facilities | |||
Number of distribution centers | 10 | ||
Combination Distribution Center | |||
Number of distribution centers | 2 |
Basis of presentation and acc_5
Basis of presentation and accounting policies - Supplier concentration (Details) - Purchases - Supplier concentration | 12 Months Ended |
Feb. 03, 2023 | |
Largest supplier | |
Concentration of risk | |
Concentration risk, percentage | 10% |
Second largest supplier | |
Concentration of risk | |
Concentration risk, percentage | 8% |
Basis of presentation and acc_6
Basis of presentation and accounting policies - Property and equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Property and equipment recorded at cost | |||
Property and equipment, gross | $ 9,145,732 | $ 7,937,774 | |
Right of use assets - finance leases | 215,052 | 162,772 | |
Less accumulated depreciation and amortization | (3,909,423) | (3,591,647) | |
Net property and equipment | 5,236,309 | 4,346,127 | |
Depreciation | |||
Depreciation expense | 717,800 | 635,900 | $ 569,300 |
Capitalized interest | |||
Interest costs capitalized | 4,800 | 1,200 | $ 100 |
Land | |||
Property and equipment recorded at cost | |||
Property and equipment, gross | 230,814 | 227,085 | |
Land improvements | |||
Property and equipment recorded at cost | |||
Property and equipment, gross | $ 98,567 | 96,402 | |
Depreciable Life | 20 years | ||
Buildings | |||
Property and equipment recorded at cost | |||
Property and equipment, gross | $ 1,561,440 | 1,446,126 | |
Buildings | Minimum | |||
Property and equipment recorded at cost | |||
Depreciable Life | 39 years | ||
Buildings | Maximum | |||
Property and equipment recorded at cost | |||
Depreciable Life | 40 years | ||
Leasehold improvements | |||
Property and equipment recorded at cost | |||
Property and equipment, gross | $ 1,011,788 | 889,782 | |
Furniture, fixtures and equipment | |||
Property and equipment recorded at cost | |||
Property and equipment, gross | $ 5,714,456 | 4,984,534 | |
Furniture, fixtures and equipment | Minimum | |||
Property and equipment recorded at cost | |||
Depreciable Life | 3 years | ||
Furniture, fixtures and equipment | Maximum | |||
Property and equipment recorded at cost | |||
Depreciable Life | 10 years | ||
Construction in progress | |||
Property and equipment recorded at cost | |||
Property and equipment, gross | $ 313,615 | $ 131,073 |
Basis of presentation and acc_7
Basis of presentation and accounting policies - Impairment, Goodwill, Balance sheet detail (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Impairment of long-lived assets | |||
Minimum period for which stores are open to be reviewed for impairment | 3 years | ||
Impairment charges included in SG&A expense | $ 2,100 | $ 2,600 | $ 2,700 |
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, General and Administrative Expense | Selling, General and Administrative Expense | Selling, General and Administrative Expense |
Goodwill and other intangible assets | |||
Impairment of intangible assets | $ 0 | $ 0 | $ 0 |
Accrued expenses and other liabilities | |||
Compensation and benefits | 214,472 | 215,355 | |
Self-insurance reserves | 136,911 | 127,719 | |
Taxes (other than taxes on income) | 296,343 | 324,438 | |
Other | 389,193 | 381,627 | |
Toal other accrued expenses and other liabilities | 1,036,919 | 1,049,139 | |
Other liabilities | |||
Self-insurance reserves | $ 137,800 | $ 129,700 | |
Maximum initial term for leases not recorded on the balance sheet | 12 months |
Basis of presentation - Account
Basis of presentation - Accounting policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Revenue recognition | |||
Liability for outstanding gift cards | $ 10.7 | $ 9.7 | |
Breakage income related to gift card program | 2.3 | 1.7 | $ 1.3 |
Advertising costs | |||
Advertising costs | 126 | 117.2 | 107.4 |
Expenses related to vendor funding for cooperative advertising offset | $ 33.4 | $ 34.3 | $ 33.4 |
3.25% Senior Notes due April 15, 2023 | |||
Other comprehensive income | |||
Credit facility term | 10 years |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Net Income | |||
Basic Earnings | $ 2,415,989 | $ 2,399,232 | $ 2,655,050 |
Diluted Earnings | $ 2,415,989 | $ 2,399,232 | $ 2,655,050 |
Shares | |||
Shares outstanding, basic | 225,148 | 234,261 | 248,171 |
Effect of dilutive share-based awards | 1,149 | 1,551 | 1,905 |
Shares outstanding, diluted | 226,297 | 235,812 | 250,076 |
Per Share Amount | |||
Basic earnings per share (in dollars per share) | $ 10.73 | $ 10.24 | $ 10.70 |
Diluted earnings per share (in dollars per share) | $ 10.68 | $ 10.17 | $ 10.62 |
Share-based awards outstanding excluded from computation of diluted earnings per share | 100 | 100 | 200 |
Income taxes - (Details)
Income taxes - (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Current: | |||
Federal | $ 400,752 | $ 472,913 | $ 614,207 |
Foreign | 279 | 384 | 127 |
State | 63,562 | 76,261 | 100,002 |
Total current income taxes | 464,593 | 549,558 | 714,336 |
Deferred: | |||
Federal | 195,529 | 93,114 | 32,433 |
Foreign | (24) | (38) | (104) |
State | 40,527 | 21,283 | 2,665 |
Total deferred income taxes | 236,032 | 114,359 | 34,994 |
Total provision (benefit) for income taxes | 700,625 | 663,917 | 749,330 |
Reconciliation between actual income taxes and amounts computed by applying federal statutory rate | |||
U.S. federal statutory rate on earnings before income taxes | 654,489 | 643,262 | 714,920 |
State income taxes, net of federal income tax benefit | 82,134 | 77,086 | 81,117 |
Jobs credits, net of federal income taxes | (37,639) | (39,936) | (27,479) |
Other, net | 1,641 | (16,495) | (19,228) |
Total provision (benefit) for income taxes | $ 700,625 | $ 663,917 | $ 749,330 |
Reconciliation between actual income taxes rate and federal statutory rate | |||
U.S. federal statutory rate on earnings before income taxes (as a percent) | 21% | 21% | 21% |
State income taxes, net of federal income tax benefit (as a percent) | 2.60% | 2.50% | 2.40% |
Jobs credits, net of federal income taxes (as a percent) | (1.20%) | (1.30%) | (0.80%) |
Other, net (as a percent) | 0.10% | (0.50%) | (0.60%) |
Total provision (benefit) for income taxes (as a percent) | 22.50% | 21.70% | 22% |
Increase in tax rate | 0.80% | ||
Decrease in tax rate | 0.30% | ||
Deferred tax assets: | |||
Deferred compensation expense | $ 12,029 | $ 11,563 | |
Accrued expenses | 7,274 | 26,984 | |
Accrued rent | 473 | 552 | |
Lease liabilities | 2,760,588 | 2,617,954 | |
Accrued insurance | 7,514 | 6,971 | |
Accrued incentive compensation | 26,534 | 30,716 | |
Share based compensation | 15,309 | 16,605 | |
Interest rate hedges | 31 | 383 | |
Tax benefit of income tax and interest reserves related to uncertain tax positions | 77 | 79 | |
State and foreign tax net operating loss carry forward, net of federal tax | 4,279 | 903 | |
State tax credit carry forwards, net of federal tax | 7,812 | 6,973 | |
Other | 22,756 | 16,715 | |
Total deferred tax assets, gross | 2,864,676 | 2,736,398 | |
Less valuation allowances, net of federal income taxes | (9,001) | (5,235) | |
Total deferred tax assets | 2,855,675 | 2,731,163 | |
Deferred tax liabilities: | |||
Property and equipment | (684,468) | (572,286) | |
Lease assets | (2,728,507) | (2,588,709) | |
Inventories | (176,798) | (68,780) | |
Trademarks | (307,734) | (310,011) | |
Prepaid insurance | (17,870) | (15,278) | |
Other | (1,204) | (1,353) | |
Total deferred tax liabilities | (3,916,581) | (3,556,417) | |
Net deferred tax liabilities | (1,060,906) | (825,254) | |
State tax credit carryforwards that will expire beginning in 2023 through 2027 | 7,800 | ||
Apportioned state net operating loss carryforwards that will expire beginning in 2029 through 2041 | 13,500 | ||
Increase in income tax amount | 3,800 | 1,100 | |
Reserve for uncertain tax positions that would impact effective tax rate if recognized | 8,000 | 6,200 | |
Interest accrued related to uncertain tax benefits | 300 | 200 | |
Potential penalties accrued related to uncertain tax benefits | 0 | 0 | |
Reserves for uncertain tax benefits included in noncurrent Other liabilities | 8,300 | 6,400 | |
Reserve for uncertain tax positions for which a reduction is reasonably possible in the next twelve months | 2,400 | ||
Income tax amounts associated with uncertain tax positions | |||
Income tax expense (benefit) | 1,797 | (1,311) | $ 2,411 |
Income tax related interest expense (benefit) | 28 | (281) | 104 |
Reconciliation of the uncertain income tax positions | |||
Beginning Balance | 6,191 | 7,502 | 5,090 |
Increases - tax positions taken in prior years | 3,499 | 2,803 | 3,857 |
Decreases - tax positions taken in prior years | (1,445) | ||
Statute expirations | (1,239) | (1,456) | |
Settlements | (463) | (2,658) | |
Ending Balance | $ 7,988 | $ 6,191 | $ 7,502 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Leases | |||
Weighted-average remaining lease term | 9 years 7 months 6 days | ||
Weighed average discount rate | 3.90% | ||
Cash paid for operating leases | $ 1,620 | $ 1,500 | $ 1,390 |
Operating lease cost | 1,610 | 1,490 | 1,380 |
Variable lease cost | $ 310 | $ 280 | $ 260 |
Less than | |||
Leases | |||
Typical period of primary lease term for operating lease, build-to-suit, maximum | 15 years |
Leases - Lease liabilities (Det
Leases - Lease liabilities (Details) $ in Thousands | 12 Months Ended |
Feb. 03, 2023 USD ($) | |
Leases | |
2023 | $ 1,675,193 |
2024 | 1,619,954 |
2025 | 1,518,975 |
2026 | 1,396,714 |
2027 | 1,255,062 |
Thereafter | 5,271,366 |
Total lease payments (a) | 12,737,264 |
Less imputed interest | (2,085,564) |
Present value of lease liabilities | 10,651,700 |
Future minimum lease payments for leases not yet commenced | $ 481,000,000 |
Current and long-term obligat_3
Current and long-term obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 31, 2023 | Feb. 03, 2023 | Sep. 20, 2022 | Jan. 28, 2022 | |
Current and long-term obligations | ||||
Debt issuance costs, net | $ (36,431) | $ (24,652) | ||
Long-term obligations | 7,009,399 | 4,172,068 | ||
Scheduled debt maturities | ||||
2023 | 1,516,478 | |||
2024 | 764,355 | |||
2025 | 514,524 | |||
2026 | 14,378 | |||
2027 | 1,164,532 | |||
Thereafter | $ 3,128,329 | |||
Base-rate loans | ||||
Current and long-term obligations | ||||
Variable rate basis | base-rate | |||
Spread on variable rate (as a percent) | 0.015% | |||
SOFR | ||||
Current and long-term obligations | ||||
Adjusted interest rate margin | 1.015% | |||
Credit Facilities | ||||
Current and long-term obligations | ||||
Borrowing availability under credit facility | $ 1,000,000 | |||
Senior unsecured credit facility, Revolving Facility | ||||
Current and long-term obligations | ||||
Current and long-term obligations | 0 | |||
Maximum financing under credit agreements | $ 2,000,000 | |||
Facility fee rate | 0.11% | |||
Borrowing availability under credit facility | $ 2,000,000 | |||
Borrowing availability except for amount reserved for commercial paper program | $ 300,000 | |||
Senior unsecured credit facility, Revolving Facility | SOFR | ||||
Current and long-term obligations | ||||
Spread on variable rate (as a percent) | 0.10% | |||
Senior unsecured credit facility, Revolving Facility | Letters of credit | ||||
Current and long-term obligations | ||||
Maximum financing under credit agreements | $ 100,000 | |||
Unsecured 364 Day Credit Facility [Member] | ||||
Current and long-term obligations | ||||
Current and long-term obligations | $ 0 | |||
Maximum financing under credit agreements | $ 750,000 | |||
Facility fee rate | 0.09% | |||
Borrowing availability under credit facility | $ 750,000 | |||
Unsecured 364 Day Credit Facility [Member] | SOFR | ||||
Current and long-term obligations | ||||
Spread on variable rate (as a percent) | 0.10% | |||
Adjusted interest rate margin | 1.035% | |||
Senior notes | ||||
Current and long-term obligations | ||||
Redemption price as a percentage of principal amount | 101% | |||
3.25% Senior Notes due April 15, 2023 | ||||
Current and long-term obligations | ||||
Current and long-term obligations | 899,681 | |||
Credit facility term | 10 years | |||
Discount on debt issuance | $ 0 | $ 319 | ||
Stated interest rate (as a percent) | 3.25% | 3.25% | ||
4.150% Senior Notes due Nov 1, 2025 | ||||
Current and long-term obligations | ||||
Current and long-term obligations | $ 499,751 | $ 499,668 | ||
Discount on debt issuance | $ 249 | $ 332 | ||
Stated interest rate (as a percent) | 4.15% | 4.15% | ||
3.875% Senior Notes due April 15. 2027 | ||||
Current and long-term obligations | ||||
Current and long-term obligations | $ 599,793 | $ 599,749 | ||
Discount on debt issuance | $ 207 | $ 251 | ||
Stated interest rate (as a percent) | 3.875% | 3.875% | ||
4.125% Senior Notes due May 1, 2028 | ||||
Current and long-term obligations | ||||
Current and long-term obligations | $ 499,713 | $ 499,664 | ||
Discount on debt issuance | $ 287 | $ 336 | ||
Stated interest rate (as a percent) | 4.125% | 4.125% | ||
3.500% Senior Notes due April 3, 2030 | ||||
Current and long-term obligations | ||||
Current and long-term obligations | $ 952,440 | $ 988,990 | ||
Discount on debt issuance | $ 504 | $ 564 | ||
Stated interest rate (as a percent) | 3.50% | 3.50% | ||
4.125% Senior Notes due April 3, 2050 | ||||
Current and long-term obligations | ||||
Current and long-term obligations | $ 495,234 | $ 495,143 | ||
Discount on debt issuance | $ 4,766 | $ 4,857 | ||
Stated interest rate (as a percent) | 4.125% | 4.125% | ||
Senior Notes Due 2024, 2027, 2032 And 2052 | ||||
Current and long-term obligations | ||||
Debt issue costs | $ 16,500 | |||
4.250% Senior Notes due September 20, 2024 | ||||
Current and long-term obligations | ||||
Current and long-term obligations | $ 749,437 | |||
Discount on debt issuance | $ 563 | 700 | $ 0 | |
Amount borrowed | $ 750,000 | |||
Stated interest rate (as a percent) | 4.25% | 4.25% | ||
4.625% Senior Notes Due Nov 1, 2027 | ||||
Current and long-term obligations | ||||
Current and long-term obligations | $ 549,505 | |||
Discount on debt issuance | $ 495 | $ 500 | 0 | |
Amount borrowed | $ 550,000 | |||
Stated interest rate (as a percent) | 4.625% | 4.625% | ||
5.000% Senior Notes due Nov 1, 2032 | ||||
Current and long-term obligations | ||||
Current and long-term obligations | $ 697,654 | |||
Discount on debt issuance | $ 2,346 | $ 2,400 | 0 | |
Amount borrowed | $ 700,000 | |||
Stated interest rate (as a percent) | 5% | 5% | ||
5.500% Senior Notes due Nov 1, 2052 | ||||
Current and long-term obligations | ||||
Current and long-term obligations | $ 299,708 | |||
Discount on debt issuance | $ 292 | $ 300 | 0 | |
Amount borrowed | $ 300,000 | |||
Stated interest rate (as a percent) | 5.50% | 5.50% | ||
Unsecured commercial paper notes | ||||
Current and long-term obligations | ||||
Current and long-term obligations | $ 1,501,900 | 54,300 | ||
Maximum maturity | 364 days | |||
Maximum aggregate borrowing amount | $ 2,000,000 | |||
Unsecured commercial paper notes | Wholly-owned subsidiary | ||||
Current and long-term obligations | ||||
Current and long-term obligations | 230,800 | |||
Other | ||||
Current and long-term obligations | ||||
Other | 200,695 | |||
Other | $ 159,525 | |||
Letter Of Credit Outside Of Revolving Facility | ||||
Current and long-term obligations | ||||
Letters of credit outstanding | $ 39,700 |
Assets and liabilities measur_3
Assets and liabilities measured at fair value (Details) $ in Thousands | Feb. 03, 2023 USD ($) |
Reported amount | Long-term obligations | |
Liabilities: | |
Long-term obligations | $ 7,009,399 |
Reported amount | Accrued expenses and other current liabilities | |
Liabilities: | |
Deferred compensation | 6,879 |
Reported amount | Noncurrent Other liabilities | |
Liabilities: | |
Deferred compensation | 38,915 |
Fair value measurements on recurring basis | Balance at the end of the period | |
Liabilities: | |
Long-term obligations | 6,926,511 |
Deferred compensation | 45,794 |
Fair value measurements on recurring basis | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | |
Liabilities: | |
Long-term obligations | 5,223,916 |
Deferred compensation | 45,794 |
Fair value measurements on recurring basis | Significant Other Observable Inputs (Level 2) | |
Liabilities: | |
Long-term obligations | $ 1,702,595 |
Benefit plans (Details)
Benefit plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Benefit plans | |||
Matching contribution expense related to the Company's 401(k) plan | $ 35.7 | $ 34 | $ 30.1 |
Compensation expense for the Dollar General Corporation CDP/SERP Plan | $ 1.2 | $ 1.3 | $ 0.9 |
Share-based payments (Details)
Share-based payments (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Share-based payments | |||
Number of shares of common stock authorized for grant | 11,838,143 | ||
Share-based compensation expense | |||
Pre-tax | $ 72,671 | $ 78,178 | $ 68,609 |
Net of tax | 56,334 | $ 57,774 | $ 50,702 |
Total unrecognized compensation cost | $ 119,600 | ||
Expected weighted average expense recognition period (in years) | 2 years 1 month 6 days | ||
Employees | |||
Share-based payments | |||
Vesting period | 4 years | ||
Board members | |||
Share-based payments | |||
Vesting period | 1 year | ||
Stock options | |||
Weighted average for key assumptions used in determining the fair value | |||
Expected dividend yield (as a percent) | 1% | 0.90% | 0.90% |
Expected stock price volatility (as a percent) | 25.40% | 26.50% | 26.40% |
Weighted average risk-free interest rate (as a percent) | 2.40% | 0.80% | 0.70% |
Expected term of options | 4 years 9 months 18 days | 4 years 10 months 24 days | 5 years 2 months 12 days |
Options Issued | |||
Balance at the beginning of the period (in shares) | 2,347,510 | ||
Granted (in shares) | 813,165 | ||
Exercise of share-based awards (in shares) | (514,264) | ||
Canceled (in shares) | (124,115) | ||
Balance, at the end of the period (in shares) | 2,522,296 | 2,347,510 | |
Exercisable at the end of the period (in shares) | 973,457 | ||
Average Exercise Price | |||
Balance at the beginning of the period (in dollars per share) | $ 133.62 | ||
Granted (in dollars per share) | 219.82 | ||
Exercised (in dollars per share) | 115.84 | ||
Canceled (in dollars per share) | 183.61 | ||
Balance at the end of the period (in dollars per share) | 162.58 | $ 133.62 | |
Exercisable at the end of the period (in dollars per share) | $ 110.74 | ||
Remaining Contractual Term | |||
Balance, at the end of the period | 7 years 1 month 6 days | ||
Exercisable at the end of the period | 5 years 2 months 12 days | ||
Intrinsic Value | |||
Balance at the end of the period | $ 168,452 | ||
Exercisable at the end of the period | $ 114,248 | ||
Weighted average grant date fair value (in dollars per share) | $ 52.06 | $ 42.89 | $ 34.60 |
Intrinsic value of options exercised | $ 62,700 | $ 132,300 | $ 116,100 |
Share-based compensation expense | |||
Pre-tax | 20,502 | 21,452 | 19,933 |
Net of tax | $ 15,893 | $ 15,853 | $ 14,730 |
Performance Stock Units | |||
Share-based payments | |||
Vesting period | 3 years | ||
Weighted average grant date fair value of awards issued (in dollars per share) | $ 214.25 | $ 193.55 | $ 154.53 |
Intrinsic Value | |||
Balance at the end of the period | $ 71,825 | ||
Units Issued | |||
Awards outstanding at the beginning of the period (in shares or rights) | 337,243 | ||
Granted (in shares or rights) | 169,657 | ||
Converted to common stock (in shares or rights) | (184,603) | ||
Canceled (in shares or rights) | (7,400) | ||
Awards outstanding at the end of the period (in shares or rights) | 314,897 | 337,243 | |
Share-based compensation expense | |||
Pre-tax | $ 26,920 | $ 33,234 | $ 27,388 |
Net of tax | $ 20,868 | $ 24,560 | $ 20,240 |
Performance Stock Units | Minimum | |||
Share-based payments | |||
Performance period | 1 year | ||
Performance Stock Units | Less than | |||
Share-based payments | |||
Performance period | 3 years | ||
Restricted Stock Units | |||
Share-based payments | |||
Weighted average grant date fair value of awards issued (in dollars per share) | $ 223.51 | $ 193.76 | $ 155.73 |
Intrinsic Value | |||
Balance at the end of the period | $ 76,923 | ||
Units Issued | |||
Awards outstanding at the beginning of the period (in shares or rights) | 307,118 | ||
Granted (in shares or rights) | 222,420 | ||
Converted to common stock (in shares or rights) | (146,834) | ||
Canceled (in shares or rights) | (45,455) | ||
Awards outstanding at the end of the period (in shares or rights) | 337,249 | 307,118 | |
Share-based compensation expense | |||
Pre-tax | $ 25,249 | $ 23,492 | $ 21,288 |
Net of tax | $ 19,573 | $ 17,361 | $ 15,732 |
Restricted Stock Units | Employees | |||
Share-based payments | |||
Vesting period | 3 years |
Segment reporting (Details)
Segment reporting (Details) $ in Thousands | 12 Months Ended | ||
Feb. 03, 2023 USD ($) segment | Jan. 28, 2022 USD ($) segment | Jan. 29, 2021 USD ($) segment | |
Net sales data for classes of similar products | |||
Net sales | $ 37,844,863 | $ 34,220,449 | $ 33,746,839 |
Number of reportable segments | |||
Number of reportable operating segments | segment | 1 | 1 | 1 |
Consumables | |||
Net sales data for classes of similar products | |||
Net sales | $ 30,155,218 | $ 26,258,605 | $ 25,906,685 |
Seasonal | |||
Net sales data for classes of similar products | |||
Net sales | 4,182,815 | 4,182,165 | 4,083,650 |
Home products | |||
Net sales data for classes of similar products | |||
Net sales | 2,332,411 | 2,322,367 | 2,209,950 |
Apparel | |||
Net sales data for classes of similar products | |||
Net sales | $ 1,174,419 | $ 1,457,312 | $ 1,546,554 |
Common stock transactions (Deta
Common stock transactions (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Aug. 24, 2022 | Apr. 07, 2023 | Feb. 03, 2023 | Oct. 28, 2022 | Jul. 29, 2022 | Apr. 29, 2022 | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Common stock transactions | |||||||||
Aggregate purchase price | $ 2,748,014 | $ 2,549,669 | $ 2,466,434 | ||||||
Cash dividend paid (in dollars per share) | $ 0.55 | $ 0.55 | $ 0.55 | $ 0.55 | $ 2.20 | $ 1.68 | $ 1.44 | ||
Subsequent event | |||||||||
Common stock transactions | |||||||||
Cash dividend declared (in dollars per share) | $ 0.59 | ||||||||
Common Stock | |||||||||
Common stock transactions | |||||||||
Shares acquired under share repurchase program | 11,643 | 12,058 | 12,297 | ||||||
Aggregate purchase price | $ 10,188 | $ 10,551 | $ 10,760 | ||||||
Common Stock | Pursuant to Authorized Repurchase Program | |||||||||
Common stock transactions | |||||||||
Common stock repurchase program, increase in the authorized amount | $ 2,000,000 | ||||||||
Common stock repurchase authorization | $ 16,000,000 | ||||||||
Shares acquired under share repurchase program | 11,600 | 12,100 | 12,300 | ||||||
Aggregate purchase price | $ 2,700,000 | $ 2,500,000 | $ 2,500,000 |