What explains DG's rising interest expenses?

Dollar General's rising interest expenses can be attributed to several factors:

1. **Increase in Debt**: Dollar General has been increasing its borrowing, which has led to higher interest expenses. The company's debt load has soared over the past few years, with the total long-term obligations, including current portions, rising from $2.19 billion at the end of calendar 2019 to $7 billion at the end of 2022. This increase in debt is a significant factor contributing to the rise in interest expenses.
2. **Capital Expenditures**: The company has been investing heavily in new store openings and renovations, which requires significant capital expenditures. For instance, Dollar General added 1,039 net stores in 2022 and renovated 1,795 stores, with capital expenditures increasing from $1.07 billion in January 2022 to $1.56 billion in January 2023. These investments have led to an increase in debt, thereby raising interest expenses.
3. **Interest Rate Environment**: The rising interest rates have also played a role in increasing Dollar General's interest expenses. As interest rates rise, the company's interest expense on debt also increases, which can have a significant impact on the bottom line.

In conclusion, Dollar General's rising interest expenses can be attributed to a combination of factors, including increased debt, capital expenditures, and the current interest rate environment. These factors have put pressure on the company's financial performance, particularly in light of a decline in operating profit and same-store sales growth.