The Federal Trade Commission and twenty state attorneys-general have sued Dollar General, alleging the chain overcharged shoppers at checkout, according to a report. Shares fell 4% on the day the suit was filed, according to another report. Dollar General’s most recent structured SEC data run through the quarter ended in July 2026, three months before the suit was announced, so the figures below describe the business the lawsuit is about, not the lawsuit itself.
Where Dollar General’s margin comes from
Revenue totalled $43.6 billion over the twelve months to 31 July 2026. Gross margin was 31.2%, the share of each sales dollar left after the cost of goods sold, before Dollar General pays for stores, staff, distribution and everything else. After those operating costs, operating margin falls to 5.6%, up 1.3 percentage points from a year earlier. Net margin, after taxes and other charges, was 3.9%.
That structure is the reason pricing accuracy matters more for a chain like this than for a retailer with wider margins. When a business keeps under four cents of net profit from every dollar of sales, small shifts in what customers actually pay at the register are not easily absorbed elsewhere in the income statement. The filings do not quantify the suit’s alleged overcharges, any penalties, or legal costs, and nothing in Dollar General’s reported numbers addresses the allegations directly.
| Measure | Value | Period |
|---|---|---|
| Revenue | $43.6bn | TTM to 31 Jul 2026 |
| Gross margin | 31.2% | TTM to 31 Jul 2026 |
| Operating margin | 5.6% | TTM to 31 Jul 2026 |
| Net margin | 3.9% | TTM to 31 Jul 2026 |
| Free cash flow margin | 4.6% | TTM to 31 Jul 2026 |
Cash generation is growing more slowly than reported profit
Net income grew 43.0% year-on-year on a trailing basis. Free cash flow, cash generated from operations after capital spending, grew 8.7% over the same period. Free cash flow margin was 4.6% of revenue, and capital expenditure absorbed 3.0% of revenue. Dividends paid took up 25.9% of free cash flow, leaving most of what the business generates for other uses.
The gap between the two growth rates means the earnings line improved faster than the cash the business actually collected. That is worth keeping in view against a legal case centred on how much Dollar General charges customers: reported profit and cash generation are not moving at the same pace, and the filings do not identify why.
There is a reasonable alternative reading. The FTC’s allegations remain allegations. Nothing in the trailing financial data confirms or refutes them, and the filings offer no figure that isolates revenue tied to the specific pricing practices under scrutiny.
How much a growth or margin slip could cost Dollar General’s valuation
Dollar General’s own valuation model uses a base-case growth assumption of 4.8%, drawn from trailing revenue growth, alongside the margin and cash-flow figures above. Holding other inputs fixed, lowering that growth assumption by 5 percentage points pushes the model’s value per share down 27.1%; raising it by 5 points pushes it up 35.5%. Margin carries comparable weight: each 1 percentage point lost from free cash flow margin pushes model value down 23.5%, while the margin gain actually recorded over the past year, if it persists, pushes model value up 4.1%. A 1 percentage point rise in the discount rate used pushes model value down 15.8%.
None of these inputs incorporate the pricing lawsuit. A legal outcome that changed Dollar General’s margin or growth trajectory would move the model through these same channels, not through a separate one. These are model values under stated assumptions, not a comparison with the share price.