What strategic moves could boost DG's EPS beyond 2026?

**Dollar General's (DG) potential to boost EPS beyond 2026 lies in a combination of strategic initiatives and operational efficiencies.** Here are several key strategies that could contribute to this goal:

1. **Expansion in Underserved Markets**: Dollar General's continued expansion into underserved markets, as evidenced by the opening of new stores in Magnolia and Ozark, presents significant growth opportunities. These new locations not only increase the company's retail footprint but also create new jobs and contribute to local economic growth, which can lead to increased sales and potentially higher EPS.
2. **Digital Transformation Initiatives**: The company's digital initiatives, such as the partnership with DoorDash for DG Pickup and the expansion of self-checkout options, demonstrate a commitment to enhancing the customer experience and operational efficiency. By leveraging technology to streamline processes and offer convenient services, Dollar General can improve customer satisfaction and reduce costs, which could positively impact EPS.
3. **SKU Rationalization and Inventory Optimization**: The "Back to Basics" strategy, which includes further SKU rationalization and inventory reduction, is expected to enhance efficiency and reduce SG&A costs. By streamlining product offerings and optimizing inventory, Dollar General can improve gross margin expansion and potentially increase EPS.
4. **Shrink Reduction and Lower Damages**: The company's focus on reducing inventory shrink and lowering damages is another strategic initiative that could contribute to margin expansion. By minimizing losses due to theft and damage, Dollar General can improve its gross profit margins, which in turn can boost EPS.
5. **Increase in Non-Consumable Sales**: Dollar General aims to increase non-consumable sales by 100 basis points by 2027. This shift in product mix could lead to higher average transaction values and potentially higher gross margins, thereby boosting EPS.
6. **Store Remodeling and Operational Efficiency**: The accelerated store remodeling plan, which covers 20% of stores annually, is expected to reduce shrink, lower maintenance costs, and minimize operational disruptions. By improving store operations and reducing costs, Dollar General can increase profitability and potentially lift EPS.
7. **Gross Margin Expansion**: The company's strategic initiatives, including the DG Media Network and efforts to increase non-consumable sales, are key drivers for gross margin expansion. As Dollar General continues to optimize its product offerings and pricing strategies, it can improve its gross margin ratio, which is essential for boosting EPS.

In conclusion, Dollar General's focus on expanding its retail footprint, enhancing the customer experience through digital initiatives, optimizing operations, and improving product mix positions it well for potential EPS growth beyond 2026.