ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ​ This discussion and analysis should be read with, and is qualified in its entirety by, the Consolidated Financial Statements and the notes thereto. It also should be read in conjunction with the Cautionary Disclosure Regarding Forward-Looking Statements and the Risk Factors disclosures set forth in the Introduction and in Item 1A of this report, respectively. ​ Executive Overview ​ We are the largest discount retailer in the United States by number of stores, with 20,662 stores located in 48 U.S. states and Mexico as of February 28, 2025, with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States. Our first stores in Mexico opened in 2023. We offer a broad selection of merchandise, including consumable products such as food, paper and cleaning products, health and beauty products and pet supplies, and non-consumable products such as seasonal merchandise, home decor and domestics, and basic apparel. Our merchandise includes national brands from leading manufacturers, as well as our own private brand selections with prices often at substantial discounts to national brands. We offer our customers these national brand and private brand products at everyday low prices (typically $10 or less) in our convenient small-box locations. ​ We believe our convenient store formats, locations, and broad selection of high-quality products at compelling values have driven our substantial growth and financial success over the years and through a variety of economic cycles. We are mindful that the majority of our customers are value-conscious, and many have low and/or fixed incomes. As a result, we are intensely focused on helping our customers make the most of their spending dollars. The primary macroeconomic factors that affect our core customers include unemployment and underemployment rates, inflation, wage growth, changes in U.S. and global trade policy, and changes in U.S. government policy and assistance programs (including cost of living adjustments), such as SNAP, unemployment benefits, and economic stimulus programs. Finally, significant unseasonable or unusual weather patterns or extreme weather can impact customer shopping behaviors. ​ Our core customers are often among the first to be affected by negative or uncertain economic conditions and among the last to feel the effects of improving economic conditions, particularly when trends are inconsistent and of an uncertain duration. Our customers continue to feel constrained in the current macroeconomic environment and to experience elevated expenses that generally comprise a large portion of their household budgets, such as rent, healthcare, energy and fuel prices, as well as cost inflation in frequently purchased household products (including food), which we expect will continue to pressure our customers’ spending overall and particularly in our non-consumables categories. This pressure contributed to a heavier promotional environment in the second half of 2024 compared to the prior year, and we expect a promotional environment in 2025 similar to that in 2024. ​ We remain committed to our long-term operating priorities as we consistently strive to improve our performance while retaining our customer-centric focus. These priorities include: 1) driving profitable sales growth, 2) capturing growth opportunities, 3) enhancing our position as a low-cost operator, and 4) investing in the growth and development of our teams. ​ We seek to drive profitable sales growth through initiatives aimed at increasing customer traffic and average transaction amount. Historically, sales in our consumables category, which tend to have lower gross margins, have been the key drivers of net sales and customer traffic, while sales in our non-consumables categories, which tend to have higher gross margins, have been the key drivers of more profitable sales growth and average transaction amount. Our sales mix has continued to shift toward consumables, which currently constitutes a historically high proportion of our sales mix. Certain of our initiatives are intended to address this sales mix trend; however, there can be no assurances that these efforts will be successful. ​ As we work to provide everyday low prices and meet our customers’ affordability needs, we remain focused on enhancing our margins through inventory shrink and damage reduction initiatives, as well as pricing and markdown optimization, effective category management and inventory reduction efforts, distribution and 28 Table of Contents transportation efficiencies, private brands penetration and global sourcing. Several of our strategic and other sales-driving initiatives are also designed to capture growth opportunities and are discussed in more detail below. ​ Throughout 2024, we continued to experience significant levels of inventory shrink and damages. While we anticipate that both shrink and damages will remain elevated in 2025, particularly when compared to fiscal years immediately preceding fiscal year 2023, we continue to take actions designed to reduce their impact and believe we will make progress in reducing our shrink and damages levels in 2025. ​ We continue to implement and invest in certain strategic initiatives that we believe will help drive profitable sales growth with both new and existing customers and capture long-term growth opportunities. Such opportunities include providing our customers with a variety of shopping access points and even greater value and convenience by leveraging and developing digital tools and technology, such as our Dollar General app, which contains a variety of tools to enhance the in-store shopping experience. We remain focused on enhancing both the in-store and digital shopping experience, while driving operational efficiency. Our partnership with a third-party delivery service is available in the majority of our stores, providing added convenience and incremental sales. Additionally, in September 2024, we partnered with the same third-party provider to fully execute a same-day home delivery offering through our DG app and website in a limited number of stores. We believe we can significantly expand this offering to additional stores in 2025. Furthermore, we believe these efforts will contribute to the continued to growth of our DG Media Network, our platform that connects brand partners with our customers. ​ In 2025, we are expanding our efforts to improve the performance and profitability of our mature stores through the rollout of an incremental remodel program, Project Elevate. This partial-remodel initiative is designed to refresh and optimize the merchandising in our stores, and in turn, enhance the shopping experience for our customers, while also mitigating future repairs and maintenance expense. Project Elevate remodels are incremental to our full-remodel program, Project Renovate. ​ We also remain focused on capturing growth opportunities. In 2024, we opened a total of 725 new stores, including five stores in Mexico, remodeled 1,621 stores, and relocated 85 stores. In 2025, we plan to open approximately 575 new stores (as well as up to 15 stores in Mexico), fully remodel approximately 2,000 stores through Project Renovate, partially remodel 2,250 stores through Project Elevate, and relocate approximately 45 stores, for a total of 4,885 real estate projects. ​ During the fourth quarter of 2024, we initiated a store portfolio optimization review of our Dollar General and pOpshelf bannered stores, which involved identifying stores for closure or re-bannering based on an evaluation of individual store performance, expected future performance, and operating conditions, among other factors. As a result of this review, we plan to close 96 Dollar General stores and 45 pOpshelf stores, and convert an additional six pOpshelf stores to Dollar General stores in the first quarter of 2025. See Note 12 to the consolidated financial statements for more detail on the store portfolio optimization, impairment and related charges. ​ pOpshelf is a unique retail concept focused on categories such as seasonal and home décor, health and beauty, home cleaning supplies, and party and entertainment goods. In light of the softer discretionary sales environment, we previously converted certain pOpshelf stores to Dollar General stores, and do not believe opening new stores in 2025 is a prudent use of capital. At the end of 2024, we operated 231 standalone pOpshelf stores. Following the completion of the pOpshelf store closures and conversions discussed above, we will operate 180 pOpshelf stores. In addition, we recorded a significant impairment expense to reflect the updated fair value of pOpshelf assets. We are taking focused action in 2025 to improve the performance of pOpshelf stores, and will continue to evaluate the brand and whether we are seeing the desired impact of these activities and optimization, although there can be no assurances that our efforts will be successful. ​ We expect store format innovation to allow us to capture additional growth opportunities as we continue to utilize the most productive of our various Dollar General store formats based on the specific market opportunity. In 2025 we expect the significant majority of the stores to be predominantly in one of our 8,500 square foot formats. This format allows for expanded high-capacity-cooler counts, an extended queue line, and a broader product assortment, including an enhanced non-consumable offering, a larger health and beauty section, and produce in select stores. 29 Table of Contents ​ We are always seeking ways to reduce or control costs that do not affect our customers’ shopping experiences. We plan to continue enhancing this position over time while employing ongoing cost discipline to reduce certain expenses as a percentage of sales. Nonetheless, we seek to maintain flexibility to invest in the business as necessary to enhance our long-term competitiveness and profitability. From time to time, our strategic initiatives, including without limitation those discussed above, have required and may continue to require us to incur upfront expenses for which there may not be an immediate return in terms of sales or enhanced profitability. ​ Certain of our operating expenses, such as wage rates, occupancy costs and depreciation and amortization, have continued to increase in recent years, due primarily to market forces such as labor availability, increases in minimum wage rates, inflation and increases in property rents and interest rates. Significant or rapid increases to federal, state or local minimum wage rates or salary levels could significantly adversely affect our earnings if we are not able to otherwise offset these increased labor costs elsewhere in our business. ​ While the overall growth rate of inflation moderated over the second half of 2024, we believe ongoing inflationary pressures could continue to affect our operating results and our vendors and customers. Moreover, increases in market interest rates have had a negative impact on our interest expense. Both inflation and higher interest rates have significantly increased new store opening costs and occupancy costs, and while we continue to have strong new store returns and plan to grow our store base significantly in 2025, these increased costs have negatively impacted our projected new store returns and influenced our new store growth plans. ​ Our teams are a competitive advantage, and we proactively seek ways to continue investing in their development. Our goal is to create an environment that attracts, develops, and retains talented personnel, particularly at the store manager level, as employees who are promoted from within our company generally have longer tenures and are greater contributors to improvements in our financial performance. We are taking actions designed to reduce our higher than targeted store manager turnover, including through budgeting and allocation of labor hours, simplifying in-store activities, and reducing excess inventory. ​ To further enhance shareholder returns, we pay a quarterly cash dividend. The declaration and amount of future dividends are subject to Board discretion and approval, although we currently expect to continue paying quarterly cash dividends. As planned, to preserve our investment grade credit rating and maintain financial flexibility, we did not repurchase any shares during 2024 under our share repurchase program and do not plan to repurchase shares during 2025. ​ We utilize key performance indicators, which are defined below, in the management of our business including same-store sales, average sales per square foot, and inventory turnover. We use these measures to maximize profitability and for decisions about the allocation of resources. Each of these measures is commonly used by investors in retail companies to measure the health of the business. ​ Same-store sales. Same-store sales are calculated based upon our stores that were open at least 13 full fiscal months and remain open at the end of the reporting period. We include stores that have been remodeled, expanded or relocated in our same-store sales calculation. Changes in same-store sales are calculated based on the comparable 52 calendar weeks in the current and prior years. The method of calculating same-store sales varies across the retail industry. As a result, our calculation of same-store sales is not necessarily comparable to similarly titled measures reported by other companies. ​ Average sales per square foot. Average sales per square foot is calculated based on total sales for the preceding 12 months as of the ending date of the reporting period divided by the average selling square footage during the period, including the end of the fiscal year, the beginning of the fiscal year, and the end of each of our three interim fiscal quarters. ​ Inventory turnover . Inventory turnover is calculated based on total cost of goods sold for the preceding four quarters divided by the average inventory balance as of the ending date of the reporting period, including the end of the fiscal year, the beginning of the fiscal year, and the end of each of our three interim fiscal quarters. 30 Table of Contents ​ A continued focus on our four operating priorities as discussed above, and other impacts as discussed below, resulted in the following overall operating and financial performance in 2024 as compared to 2023. Basis points, as referred to below, are equal to 0.01% as a percentage of net sales. ​ ● Net sales in 2024 increased 5.0%. Sales in same-stores increased 1.4%, primarily due to an increase in customer traffic. Average sales per square foot in 2024 and 2023 were $263 and $264, respectively . ​ ● The gross profit rate decreased by 70 basis points due primarily to increased inventory markdowns, a greater proportion of sales coming from the consumables category and increased inventory damages. ​ ● SG&A as a percentage of sales increased by 140 basis points primarily due to impairment charges totaling $214.2 million related to the store portfolio optimization review and increases in retail labor, depreciation and amortization and store occupancy costs. ​ ● Operating profit decreased 29.9% to $1.71 billion in 2024 compared to $2.45 billion in 2023. ​ ● Interest expense, net decreased by $52.5 million in 2024 primarily due to higher average cash balances and the repayment of long-term debt. ​ ● The change in the effective income tax rate to 21.8% in 2024 from 21.6% in 2023 was primarily due to a higher state effective tax rate and a decreased benefit from stock-based compensation partially offset by the effect of certain rate-impacting items on lower earnings before taxes compared to 2023. ​ ● We reported net income of $1.13 billion, or $5.11 per diluted share, for 2024 compared to net income of $1.66 billion, or $7.55 per diluted share, for 2023. ​ ● We generated approximately $2.996 billion of cash flows from operating activities in 2024, an increase of 25.3% compared to 2023. ​ ● Inventory turnover was 4.1 times, and inventories decreased 6.9% on a per store basis compared to 2023. ​ Readers should refer to the detailed discussion of our operating results below for additional comments on financial performance in the current year as compared with the prior years presented. ​ Results of Operations ​ Accounting Periods. The following text contains references to years 2024, 2023, and 2022, which represent fiscal years ended January 31, 2025, February 2, 2024, and February 3, 2023, respectively. Our fiscal year ends on the Friday closest to January 31. Fiscal years 2024 and 2023 were 52-week accounting periods and fiscal year 2022 was a 53-week accounting period. ​ Seasonality . The nature of our business is somewhat seasonal. Primarily because of sales of Christmas-related merchandise, operating profit in our fourth quarter (November, December and January) has historically been higher than operating profit achieved in each of the first three quarters of the fiscal year. However, more recently, and in particular fiscal years 2023 and 2024, this has not been the case. Expenses, and to a greater extent operating profit, vary by quarter. Results of a period shorter than a full year may not be indicative of results expected for the entire year. Furthermore, the seasonal nature of our business may affect comparisons between periods. ​ 31 Table of Contents The following table contains results of operations data for fiscal years 2024, 2023, and 2022, and the dollar and percentage variances among those years. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 vs. 2023 2023 vs. 2022 ​ (amounts in millions, except ​ ​ ​ ​ ​ ​ ​ Amount % Amount % ​ per share amounts) ​ ​ 2024 ​ 2023 ​ 2022 ​ Change ​ Change Change ​ Change ​ Net sales by category: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumables ​ ​ $ 33,370.9 ​ $ 31,342.6 ​ $ 30,155.2 ​ $ 2,028.3 ​ 6.5 % $ 1,187.4 ​ 3.9 % % of net sales ​ ​ 82.17 % 81.01 % 79.68 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Seasonal ​ ​ 4,073.3 ​ 4,083.8 ​ 4,182.8 ​ (10.5) ​ (0.3) ​ (99.0) ​ (2.4) ​ % of net sales ​ ​ 10.03 % 10.55 % 11.05 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Home products ​ ​ 2,074.4 ​ 2,163.8 ​ 2,332.4 ​ (89.4) ​ (4.1) ​ (168.6) ​ (7.2) ​ % of net sales ​ ​ 5.11 % 5.59 % 6.16 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Apparel ​ ​ 1,093.7 ​ 1,101.4 ​ 1,174.4 ​ (7.7) ​ (0.7) ​ (73.0) ​ (6.2) ​ % of net sales ​ ​ 2.69 % 2.85 % 3.10 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ ​ $ 40,612.3 ​ $ 38,691.6 ​ $ 37,844.9 ​ $ 1,920.7 ​ 5.0 % $ 846.7 ​ 2.2 % Cost of goods sold ​ ​ 28,594.8 ​ 26,972.6 ​ 26,024.8 ​ 1,622.2 ​ 6.0 ​ 947.8 ​ 3.6 ​ % of net sales ​ ​ 70.41 % 69.71 % 68.77 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit ​ ​ 12,017.5 ​ 11,719.0 ​ 11,820.1 ​ 298.5 ​ 2.5 ​ (101.1) ​ (0.9) ​ % of net sales ​ ​ 29.59 % 30.29 % 31.23 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative expenses ​ ​ 10,303.4 ​ 9,272.7 ​ 8,491.8 ​ 1,030.7 ​ 11.1 ​ 780.9 ​ 9.2 ​ % of net sales ​ ​ 25.37 % 23.97 % 22.44 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating profit ​ ​ 1,714.1 ​ 2,446.3 ​ 3,328.3 ​ (732.2) ​ (29.9) ​ (882.0) ​ (26.5) ​ % of net sales ​ ​ 4.22 % 6.32 % 8.79 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense, net ​ ​ 274.3 ​ 326.8 ​ 211.3 ​ (52.5) ​ (16.1) ​ 115.5 ​ 54.7 ​ % of net sales ​ ​ 0.68 % 0.84 % 0.56 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Other (income) expense ​ ​ — ​ — ​ 0.4 ​ — ​ — ​ (0.4) ​ — ​ % of net sales ​ ​ 0.00 % 0.00 % 0.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ ​ 1,439.8 ​ 2,119.5 ​ 3,116.6 ​ (679.8) ​ (32.1) ​ (997.1) ​ (32.0) ​ % of net sales ​ ​ 3.55 % 5.48 % 8.24 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense ​ ​ 314.5 ​ 458.2 ​ 700.6 ​ (143.7) ​ (31.4) ​ (242.4) ​ (34.6) ​ % of net sales ​ ​ 0.77 % 1.18 % 1.85 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ ​ $ 1,125.3 ​ $ 1,661.3 ​ $ 2,416.0 ​ $ (536.0) ​ (32.3) % $ (754.7) ​ (31.2) % % of net sales ​ ​ 2.77 % 4.29 % 6.38 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share ​ ​ $ 5.11 ​ $ 7.55 ​ $ 10.68 ​ $ (2.44) ​ (32.3) % $ (3.13) ​ (29.3) % ​ Net Sales . The net sales increase in 2024 was primarily due to sales from new stores and an increase in same-store sales of 1.4% compared to 2023, partially offset by the impact of store closures. The increase in same-store sales reflects a 1.1% increase in customer traffic and a 0.3% increase in average transaction amount. The increase in average transaction amount was driven by higher average item retail prices and an increase in items per transaction. Same-store sales increased in the consumables category and declined in the home products, seasonal and apparel categories. In 2024, our 19,633 same-stores accounted for sales of $38.8 billion. ​ The net sales increase in 2023 was primarily due to sales from new stores and an increase in same-store sales of 0.2% compared to 2022, partially offset by the impact of store closures. Net sales for the 53rd week of fiscal 2022 were $678.1 million. The increase in same-store sales reflects an increase in customer traffic, partially offset by a decrease in the average transaction amount. The decrease in average transaction amount was driven by a decline in items per transaction, partially offset by higher average item retail prices. Same-store sales increased in the consumables category, and declined in the home products, seasonal and apparel categories. In 2023, our 18,763 same-stores accounted for sales of $36.9 billion. ​ Gross Profit. In 2024, gross profit increased by 2.5%, and as a percentage of net sales decreased by 70 basis points to 29.6% compared to 2023, primarily driven by increased markdowns, a greater proportion of sales coming from the consumables category and increased inventory damages, partially offset by decreased transportation costs. ​ In 2023, gross profit decreased by 0.9%, and as a percentage of net sales decreased by 94 basis points to 32 Table of Contents 30.3% compared to 2022, primarily driven by increased shrink and inventory markdowns, lower inventory markups, a higher proportion of lower margin consumables sales, and increased damages. Partially offsetting the factors which decreased our overall gross profit rate were a lower LIFO provision and decreased transportation costs. ​ SG&A. SG&A as a percentage of net sales was 25.4% in 2024 compared to 24.0% in 2023, an increase of 140 basis points. The increase reflects fourth quarter impairment charges totaling $214.2 million related to the store portfolio optimization review as discussed above in the Executive Summary and Note 12 to the consolidated financial statements. Other expenses that were higher as a percentage of net sales in 2024 were retail labor, depreciation and amortization, store occupancy costs and incentive compensation. ​ SG&A as a percentage of net sales was 24.0% in 2023 compared to 22.4% in 2022, an increase of 153 basis points. The primary expenses that were higher as a percentage of net sales in 2023 were retail labor, store occupancy costs, depreciation and amortization, repairs and maintenance, and other services purchased, including debt and credit card transaction fees, which were partially offset by a decrease in incentive compensation. ​ Interest Expense, net . Interest expense, net decreased $52.5 million to $274.3 million in 2024 compared to 2023 due to higher average cash balances and the repayment of long-term debt. Interest expense, net increased $115.5 million to $326.8 million in 2023 compared to 2022, primarily due to higher outstanding borrowings and higher interest rates. See the detailed discussion under “Liquidity and Capital Resources” regarding the financing of various long-term obligations. ​ Income Taxes . The effective income tax rate for 2024 was 21.8% compared to a rate of 21.6% for 2023 which represents a net increase of 0.2 percentage points. The effective tax rate was higher in 2024 primarily due to a higher state effective tax rate and a decreased benefit from stock-based compensation partially offset by the effect of certain rate-impacting items on lower earnings before taxes. ​ The effective income tax rate for 2023 was 21.6% compared to a rate of 22.5% for 2022 which represents a net decrease of 0.9 percentage points. The effective tax rate was lower in 2023 primarily due to the effect of certain rate-impacting items (such as federal tax credits) on lower earnings before taxes and a lower state effective rate resulting from increased recognition of state tax credits. ​ Effects of Inflation ​ In 2024 and 2023, we experienced moderate increases in product costs due to lower rates of inflation. In addition, we continued to experience elevated but relatively stable costs of building materials and certain of our other capital costs. In 2022, we experienced higher rates of inflation affecting product costs, the costs of building materials and certain of our other capital costs. ​ Liquidity and Capital Resources ​ Current Financial Condition and Recent Developments ​ During the past three years, we have generated an aggregate of approximately $7.4 billion in cash flows from operating activities and incurred approximately $4.6 billion in capital expenditures. During that period, we expanded the number of stores we operate by 2,464, representing store growth of approximately 14%, and we remodeled or relocated 5,764 stores, or approximately 32% of the stores we operated as of the beginning of the three-year period. In 2025, we intend to pursue accelerated growth in remodels, including Project Elevate, with slower growth for new stores and fewer relocations. ​ At January 31, 2025, we had a $2.375 billion unsecured revolving credit agreement (the “Revolving Facility”), $6.2 billion aggregate principal amount of senior notes, and a commercial paper program that may provide borrowing availability of up to $2.0 billion. At January 31, 2025, we had total consolidated outstanding debt (including the current portion of long-term obligations) of $6.2 billion, most of which was in the form of senior notes. All of our material borrowing arrangements are described in greater detail below. Our borrowing availability under the Revolving Facility may be effectively limited by our commercial paper notes (“CP Notes”) as further 33 Table of Contents described below. The information contained in Note 5 to the consolidated financial statements contained in Part II, Item 8 of this report is incorporated herein by reference. ​ We believe our cash flow from operations, and our existing cash balances, combined with availability under the Revolving Facility, CP Notes and access to the debt markets, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, capital spending and anticipated dividend payments for a period that includes the next twelve months as well as the next several years. However, our ability to maintain sufficient liquidity may be affected by numerous factors, many of which are outside of our control. Depending on our liquidity levels, conditions in the capital markets and other factors, we may from time to time consider the issuance of debt, equity or other securities, the proceeds of which could provide additional liquidity for our operations. ​ For fiscal 2025, we anticipate potential combined borrowings under the Revolving Facility and CP Notes to be a maximum of approximately $400 million outstanding at any one time. ​ Revolving Facility ​ On September 3, 2024, we entered into an amended and restated credit agreement which provides for a $2.375 billion unsecured five-year revolving credit facility (the “Revolving Facility”) and allows for a subfacility for letters of credit of up to $100 million, of which $70 million is currently committed and $30 million is currently uncommitted. The Revolving Facility also includes a subfacility with an available borrowing capacity of up to $50 million for short-term borrowings referred to as swingline loans. The Revolving Facility is scheduled to mature on September 3, 2029. ​ Borrowings under the Revolving Facility bear interest at a rate equal to an applicable interest rate margin plus, at our 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 January 31, 2025 was 1.015% for Adjusted Term SOFR borrowings and 0.015% for base-rate borrowings. We must also 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 January 31, 2025, 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 our long-term senior unsecured debt ratings. ​ The credit agreement governing the Revolving Facility contains a number of customary affirmative and negative covenants that, among other things, restrict, subject to certain exceptions, our (and our subsidiaries’) ability to: incur additional liens; sell all or substantially all of our assets; consummate certain fundamental changes or change in our lines of business; and incur additional subsidiary indebtedness. The credit agreement governing the Revolving Facility also contains financial covenants which require the maintenance of a minimum fixed charge coverage ratio and a maximum leverage ratio. As of January 31, 2025, we were in compliance with all such covenants. On March 11, 2025, we amended the credit agreement governing the Revolving Facility to increase the maximum leverage ratio and decrease the minimum fixed charge ratio until January 30, 2026, or earlier at our option upon achieving certain financial covenant milestones (“Covenant Relief Period”). During the Covenant Relief Period, we are restricted from repurchasing shares of our common stock and the ability to incur certain additional liens and subsidiary debt is reduced. The credit agreement governing the Revolving Facility also contains customary events of default. ​ As of January 31, 2025, we had no outstanding borrowings, no outstanding letters of credit, and borrowing availability of $2.375 billion under the Revolving Facility that, due to our intention to maintain borrowing availability related to the commercial paper program described below, could contribute liquidity of $2.18 billion. In addition, we had outstanding letters of credit of $50.9 million which were issued pursuant to separate agreements. ​ 364-Day Revolving Facility ​ The Company had a 364-day $750 million unsecured revolving credit facility (the “364-Day Revolving 34 Table of Contents Facility”) which expired on January 30, 2024. ​ Commercial Paper ​ We may issue 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 our other unsecured and unsubordinated indebtedness. We intend 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 January 31, 2025, our consolidated balance sheet reflected no outstanding unsecured CP Notes. CP Notes totaling $195.0 million were held by a wholly-owned subsidiary and therefore are not reflected in the consolidated balance sheets. ​ Senior Notes ​ Our Senior Notes consist of the following issuances: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In millions) ​ ​ ​ Annual ​ ​ ​ Interest ​ ​ ​ Aggregate ​ ​ ​ ​ Issuance ​ Interest ​ Maturity ​ Rate ​ ​ ​ Principal ​ ​ Discount ​ Date ​ Schedule ​ November 2025 ​ 4.150 % ​ $ 500.0 ​ $ 0.8 ​ October 2015 ​ May 1 and November 1 ​ April 2027 ​ 3.875 ​ ​ ​ 600.0 ​ ​ 0.4 ​ April 2017 ​ April 15 and October 15 ​ November 2027 ​ 4.625 ​ ​ ​ 550.0 ​ ​ 0.5 ​ September 2022 ​ May 1 and November 1 ​ May 2028 ​ 4.125 ​ ​ ​ 500.0 ​ ​ 0.5 ​ April 2018 ​ May 1 and November 1 ​ July 2028 ​ 5.200 ​ ​ ​ 500.0 ​ ​ 0.1 ​ June 2023 ​ January 5 and July 5 ​ April 2030 ​ 3.500 ​ ​ ​ 1,000.0 ​ ​ 0.7 ​ April 2020 ​ April 3 and October 3 ​ November 2032 ​ 5.000 ​ ​ ​ 700.0 ​ ​ 2.4 ​ September 2022 ​ May 1 and November 1 ​ July 2033 ​ 5.450 ​ ​ ​ 1,000.0 ​ ​ 1.6 ​ June 2023 ​ January 5 and July 5 ​ April 2050 ​ 4.125 ​ ​ ​ 500.0 ​ ​ 5.0 ​ April 2020 ​ April 3 and October 3 ​ November 2052 ​ 5.500 ​ ​ ​ 300.0 ​ ​ 0.3 ​ September 2022 ​ May 1 and November 1 ​ ​ The table above is comprised of what is collectively referred to as 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”). ​ We may redeem some or all of the 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 our Senior Notes has the right to require us 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. We have provided notice to the trustees of our $500.0 million senior unsecured notes scheduled to mature on November 1, 2025, that we intend to redeem the entire principal amount of such notes on April 29, 2025. We expect to use cash on hand for the redemption. ​ The Senior Indenture contains covenants limiting, among other things, our ability (subject to certain exceptions) to consolidate, merge, or sell or otherwise dispose of all or substantially all of our assets; and our ability and the ability of our subsidiaries 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 our Senior Notes to become or to be declared due and payable, as applicable. ​ 35 Table of Contents Rating Agencies ​ Our credit ratings, as well as future rating agency actions, could (i) impact our ability to finance our operations on satisfactory terms; (ii) affect our financing costs; and (iii) affect our insurance premiums and collateral requirements necessary for our self-insured programs. There can be no assurance that we will maintain or improve our current credit ratings, particularly, if we are unable to lower our leverage ratios to levels and within time frames deemed acceptable to the rating agencies. The credit ratings for our borrowings are as follows: ​ ​ ​ ​ Rating Agency ​ Senior unsecured debt rating ​ Commercial paper rating ​ Outlook Moody’s ​ Baa2 ​ P-2 ​ Negative outlook Standard & Poor’s ​ BBB ​ A-2 ​ Negative outlook ​ Future Cash Requirements ​ The following table summarizes significant estimated future cash requirements under our various contractual obligations and other commitments at January 31, 2025, in total and disaggregated into current (<1 year) and long-term (1 or more years) obligations (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due by Period Contractual obligations Total < 1 year 1 - 3 years 3 - 5 years 5+ years Long-term debt obligations ​ $ 6,331,076 ​ $ 519,463 ​ $ 1,183,315 ​ $ 1,023,667 ​ $ 3,604,631 ​ Interest(a) ​ 2,460,357 ​ 294,311 ​ 533,208 ​ 398,432 ​ 1,234,406 ​ Self-insurance liabilities(b) ​ 334,425 ​ 165,085 ​ ​ 121,100 ​ ​ 45,790 ​ ​ 2,450 ​ Operating lease obligations ​ 13,761,782 ​ 1,921,426 ​ ​ 3,521,529 ​ ​ 2,846,911 ​ ​ 5,471,916 ​ Subtotal ​ $ 22,887,640 ​ $ 2,900,285 ​ $ 5,359,152 ​ $ 4,314,800 ​ $ 10,313,403 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments Expiring by Period Commercial commitments(c) Total < 1 year 1 - 3 years 3 - 5 years 5+ years Letters of credit ​ $ 10,458 ​ $ 10,458 ​ $ — ​ $ — ​ $ — ​ Purchase obligations(d) ​ 1,295,661 ​ 1,153,619 ​ 134,975 ​ 7,067 ​ — ​ Subtotal ​ $ 1,306,119 ​ $ 1,164,077 ​ $ 134,975 ​ $ 7,067 ​ $ — ​ Total contractual obligations and commercial commitments ​ $ 24,193,759 ​ $ 4,064,362 ​ $ 5,494,127 ​ $ 4,321,867 ​ $ 10,313,403 ​ (a) Represents obligations for interest payments on long-term debt and includes projected interest on variable rate long-term debt using 2024 year-end rates and balances. Variable rate long-term debt includes the Revolving Facility (although such facility had a balance of zero as of January 31, 2025), the CP Notes (which had a balance of zero as of January 31, 2025, and which amount is net of $195.0 million held by a wholly-owned subsidiary), and interest rate swaps being accounted for as fair value hedges. ​ (b) We retain a significant portion of the risk for our workers’ compensation, employee health, general liability, property loss, auto liability, and certain third-party landlord claims exposures. As these obligations do not have scheduled maturities, these amounts represent undiscounted estimates based upon actuarial assumptions. Substantially all amounts are reflected on an undiscounted basis in our consolidated balance sheets. ​ (c) Commercial commitments include information technology license and support agreements, supplies, fixtures, letters of credit for import merchandise, and other inventory purchase obligations. ​ (d) Purchase obligations include legally binding agreements for software licenses and support, supplies, fixtures, and merchandise purchases (excluding such purchases subject to letters of credit). ​ 36 Table of Contents Share Repurchase Program ​ Our common stock repurchase program had a total remaining authorization of approximately $1.38 billion at January 31, 2025. The authorization 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 repurchase authorization has no expiration date, and future repurchases will depend on a variety of factors, including price, market conditions, compliance with the covenants and restrictions under our debt agreements, cash requirements, excess debt capacity, results of operations, financial condition and other factors. The repurchase program may be modified or terminated from time to time at the discretion of our Board of Directors. To preserve our investment grade credit rating and maintain financial flexibility, we did not repurchase any shares under this program in 2024 and do not plan to repurchase shares during fiscal 2025. For more detail, see Note 11 to the consolidated financial statements. ​ Other Considerations ​ In March 2025, the Board of Directors declared a quarterly cash dividend of $0.59 per share which is payable on or before April 22, 2025 to shareholders of record of our common stock on April 8, 2025. We paid quarterly cash dividends of $0.59 per share in 2024. Although the Board currently expects to continue regular quarterly cash dividends, the declaration and amount of future cash dividends are subject to the Board’s sole discretion and will depend upon, among other factors, our results of operations, cash requirements, financial condition, contractual restrictions, excess debt capacity and other factors that our Board may deem relevant in its sole discretion. ​ Our inventory balance represented approximately 47% of our total assets exclusive of operating lease assets, goodwill, and other intangible assets as of January 31, 2025. Our ability to effectively manage our inventory balances can have a significant impact on our cash flows from operations during a given fiscal year as discussed further below. Inventory purchases are often somewhat seasonal in nature, such as the purchase of warm-weather or Christmas-related merchandise. Efficient management of our inventory has been and continues to be an area of focus for us. ​ As described in Note 7 to the consolidated financial statements, we are involved in a number of legal actions and claims, some of which could potentially result in material cash payments. Adverse developments in those actions could materially and adversely affect our liquidity. ​ Cash Flows ​ Cash flows from operating activities. Cash flows from operating activities were $2.996 billion in 2024, which represents a $604.3 million increase compared to 2023. Changes in merchandise inventories resulted in a $230.2 million increase in our working capital in 2024 compared to the decrease of $299.1 million in 2023 as described in greater detail below. Changes in accounts payable resulted in a $302.9 million increase in our working capital in 2024 compared to a $36.9 million increase in 2023, due primarily to the timing of inventory receipts and related payments. Changes in accrued expenses resulted in a $91.8 million increase in 2024 compared to a $39.2 million decrease in 2023. Net income decreased to $1.1 billion in 2024 as compared to $1.7 billion in 2023. Changes in other noncash losses resulted in a $296.2 million increase as compared to a $89.0 million increase in 2023 primarily due to impairment charges in 2024. Changes in income taxes paid in 2024 compared to 2023 are primarily due to the decrease in pre-tax earnings in 2024 and the timing of payments for income taxes. ​ Cash flows from operating activities were $2.4 billion in 2023, which represents a $407.2 million increase compared to 2022. Changes in merchandise inventories resulted in a $299.1 million decrease in our working capital in 2023 compared to the decrease of $1.7 billion in 2022 as described in greater detail below. Changes in accounts payable resulted in a $36.9 million increase in our working capital in 2023 compared to a $194.7 million decrease in 2022, due primarily to the timing of inventory receipts and related payments. Net income decreased to $1.7 billion in 2023 as compared to $2.4 billion in 2022. Changes in other noncash losses resulted in a $89.0 million increase as compared to a $530.5 million increase in 2022 primarily due to a lower LIFO provision in 2023. Changes in income 37 Table of Contents taxes including a decrease in cash paid for income taxes in 2023 compared to 2022 are primarily due to the decrease in pre-tax earnings in 2023. ​ On an ongoing basis, we closely monitor and manage our inventory balances, and they may fluctuate from period to period based on new store openings, the timing of purchases, and other factors. Merchandise inventories decreased by 4% in 2024 and increased by 3% in 2023 and 20% in 2022. The decrease in the 2024 period primarily reflects a decrease in the consumables and home products categories due to inventory reduction efforts and core SKU reductions. Offsetting the inventory decrease in consumables and home products were increases in the seasonal and apparel categories primarily due to an increase in overall store count. Percent and dollar changes in our four inventory categories for the past three years were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ January 31, ​ ​ February 2, ​ ​ February 3, ​ Increase (decrease) ​ 2025 ​ ​ 2024 ​ 2023 Consumables ​ $ (287.4) ​ (6) % ​ $ 744.5 ​ 20 % ​ $ 367.8 ​ 11 % Seasonal ​ ​ 14.7 ​ 1 ​ ​ ​ (207.1) ​ (13) ​ ​ ​ 455.5 ​ 42 ​ Home products ​ ​ (18.3) ​ (2) ​ ​ ​ (291.3) ​ (28) ​ ​ ​ 315.4 ​ 43 ​ Apparel ​ ​ 8.0 ​ 2 ​ ​ ​ (12.6) ​ (4) ​ ​ ​ 7.8 ​ 2 ​ ​ Cash flows from investing activities . Significant components of property and equipment purchases included the following approximate amounts: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ ​ January 31, ​ February 2, ​ February 3, ​ (amounts in millions, except store count amounts) 2025 ​ 2024 ​ 2023 Existing stores improvements, upgrades, remodels, and relocations ​ $ 605.3 ​ $ 683.4 ​ $ 588.5 ​ Distribution and transportation-related capital expenditures ​ ​ 342.9 ​ ​ 542.4 ​ ​ 478.7 ​ New stores primarily for leasehold improvements, fixtures and equipment ​ 295.9 ​ 390.2 ​ 372.6 ​ Information systems upgrades and technology-related projects ​ 52.2 ​ 67.1 ​ 62.2 ​ Other ​ 13.6 ​ 17.1 ​ 58.6 ​ Total purchases of property and equipment ​ $ 1,309.9 ​ $ 1,700.2 ​ $ 1,560.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Store Counts ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ New stores ​ ​ 725 ​ ​ 987 ​ ​ 1,039 ​ Remodeled or relocated ​ ​ 1,706 ​ ​ 2,136 ​ ​ 1,922 ​ ​ Capital expenditures during 2025 are projected to be in the range of $1.3 billion to $1.4 billion. We anticipate funding 2025 capital requirements with a combination of some or all of the following: existing cash balances, cash flows from operations, availability under our Revolving Facility and/or the issuance of additional CP Notes. We plan to continue to invest in store growth and development with approximately 575 new stores in the United States and up to 15 new stores in Mexico and approximately 4,295 remodels or relocations, including fully remodeling approximately 2,000 stores through Project Renovate, remodeling approximately 2,250 through Project Elevate, and relocating approximately 45 stores. Capital expenditures in 2025 are anticipated to support our store growth as well as our remodel and relocation initiatives, including capital outlays for leasehold improvements, fixtures and equipment; the construction of new stores; costs to support and enhance our supply chain initiatives for existing distribution center facilities and replacement of certain transportation related assets; technology initiatives; as well as routine and ongoing capital requirements. ​ Cash flows from financing activities . During the 2024 period we had repayments of long-term obligations of $770.2 million. We paid cash dividends of $519.0 million and did not repurchase shares of our common stock. ​ In 2023, we received proceeds from the issuance of long-term debt of $1.5 billion. Net commercial paper borrowings decreased by $1.5 billion, and we received and repaid $500.0 million under the 364-Day Revolving Facility. We paid cash dividends of $518.0 million and did not repurchase shares of our common stock. ​ 38 Table of Contents In 2022, we received proceeds from the issuance of long-term debt of $2.3 billion, and our repayments of long-term debt totaled $911.3 million. Net commercial paper borrowings increased by $1.4 billion, and we had no borrowings or repayments under the Revolving Facility or the 364-Day Revolving Facility. We repurchased 11.6 million shares of our common stock at a total cost of $2.7 billion and paid cash dividends of $493.7 million. ​ Critical Accounting Policies and Estimates ​ The preparation of financial statements in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures. In addition to the estimates presented below, there are other items within our financial statements that require estimation but are not deemed critical as defined below. We believe these estimates are reasonable and appropriate. However, if actual experience differs from the assumptions and other considerations used, the resulting changes could have a material effect on the financial statements taken as a whole. ​ Management believes the following policies and estimates are critical because they involve significant judgments, assumptions, and estimates. Management has discussed the development and selection of the critical accounting estimates with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed the disclosures presented below relating to those policies and estimates. See Note 1 to the consolidated financial statements for a detailed discussion of our principal accounting policies. ​ Merchandise Inventories . Merchandise inventories are stated at the lower of cost or market (“LCM”) with cost determined using the retail last in, first out (“LIFO”) method. We use the retail inventory method (“RIM”) to calculate gross profit and the resulting valuation of inventories at cost, which are computed utilizing a calculated cost-to-retail inventory ratio to the retail value of sales at an inventory department level. We apply the RIM to these departments, which are groups of products that are fairly uniform in terms of cost, selling price relationship and turnover. The RIM will result in valuing inventories at LCM if permanent markdowns are recorded timely as a reduction of the retail value of inventories. Inherent in the RIM calculation are certain management judgments and estimates that may impact the ending inventory valuation at cost, as well as the gross profit recognized. These judgments include ensuring departments consist of similar products, recording estimated shrinkage between physical inventories, and timely recording of markdowns needed to sell inventory. ​ Factors considered in the determination of markdowns include current and anticipated demand based on changes in competitors’ practices, consumer preferences, consumer spending, significant weather events and unseasonable weather patterns. Certain of these factors are outside of our control and may result in greater than estimated markdowns to entice consumer purchases of excess inventory. The amount and timing of markdowns may vary significantly from year to year. ​ We perform physical inventories in a significant majority of our stores on an annual basis. We calculate our shrink provision based on actual physical inventory results during the fiscal period and an accrual for estimated shrink occurring subsequent to a physical inventory through the end of the fiscal reporting period. This accrual is calculated as a percentage of sales at each retail store, at a department level, based on the store’s most recent historical shrink rate. From time to time as circumstances may warrant, we consider more recent shrink experience in the calculation of our shrink accrual. The impact of doing so has not been material. To the extent that subsequent physical inventories yield different results than the estimated accrual, our effective shrink rate for a given reporting period will include the impact of adjusting to the actual results. ​ We believe our estimates and assumptions related to the application of the RIM results in a merchandise inventory valuation that reasonably approximates cost on a consistent basis. ​ We perform an annual LIFO analysis whereby all merchandise units are considered for inclusion in the index formulation. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels and costs at that time. In contrast, interim LIFO calculations are based on management’s annual estimates of sales, the rate of inflation or deflation, and year-end inventory levels. We also perform analyses for determining obsolete inventory, adjusting inventory on a quarterly basis to an LCM value based on various 39 Table of Contents management assumptions including estimated below cost markdowns not yet recorded, but required to liquidate such inventory in future periods. ​ ​ Impairment of Long-lived Assets. Long-lived assets, including right of use assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The evaluation is performed primarily at the store level, which is the lowest level of identifiable cash flows that are largely independent of cash flows of other assets and liabilities . Impairment of long-lived assets results when the carrying value of the assets exceeds the estimated undiscounted future cash flows generated by the assets. Our estimate of undiscounted future store cash flows is based upon historical operations of the stores and estimates of future profitability which encompasses many factors that are subject to variability and are 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 projected future cash flows (discounted at our credit adjusted risk-free rate) or other reasonable estimates of fair market value. Changes in these estimates, assumptions or projections could materially affect the determination of fair value or impairment. ​ Insurance Liabilities . We retain a significant portion of the risk for our workers’ compensation, employee health, general liability, property loss, auto liability and certain third-party landlord claim exposures. These represent significant costs primarily due to our large employee base and number of stores. Provisions are made for these liabilities on an undiscounted basis. Certain of these liabilities are based on actual claim data and estimates of incurred but not reported claims developed using actuarial methodologies based on historical claim trends, which have been and are anticipated to continue to be materially accurate. If future claim trends deviate from recent historical patterns, or other unanticipated events affect the number and significance of future claims, we may be required to record additional expenses or expense reductions, which could be material to our future financial results. ​ Contingent Liabilities – Income Taxes. Income tax reserves are determined using the methodology established by accounting standards relating to uncertainty in income taxes. These standards require 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 liabilities to be estimated based on provisions of the tax law which may be subject to change or varying interpretation. If our determinations and estimates prove to be inaccurate, the resulting adjustments could be material to our future financial results. ​ Lease Accounting . Lease liabilities are recorded at a discount based upon our estimated collateralized incremental borrowing rate which involves significant judgments and estimates. Factors incorporated into the calculation of lease discount rates include the valuations and yields of our 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, we use the estimated credit spread improvement that would result from an upgrade of one ratings classification by tenor. Many of our stores typically carry a primary lease term of up to 15 years with multiple renewal options. We also have stores subject to shorter-term leases and many of these leases also have renewal options. We record single lease expense on a straight-line basis over the lease term including any option periods that are reasonably certain to be renewed, commencing on the date that we take physical possession of the property from the landlord. Tenant allowances, to the extent received, are recorded as a reduction of the right of use asset. Improvements of leased properties are amortized over the shorter of the life of the applicable lease term or the estimated useful life of the asset. ​ Share-Based Payments . Our stock option awards are valued on an individual grant basis using the Black-Scholes-Merton closed form option pricing model. We believe that this model fairly estimates the value of our stock option awards. The application of this valuation model involves assumptions that are judgmental in the valuation of stock options, which affects compensation expense related to these options. These assumptions include the term that the options are expected to be outstanding, the historical volatility of our stock price, applicable interest rates and the dividend yield of our stock. Other factors involving judgments that affect the expensing of share-based payments include estimated forfeiture rates of share-based awards. Historically, these estimates have been materially accurate; 40 Table of Contents however, if our estimates differ materially from actual experience, we may be required to record additional expense or reductions of expense, which could be material to our future financial results. ​ ​ ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ​ Financial Risk Management ​ We are exposed to market risk primarily from adverse changes in interest rates and commodity prices. To minimize this risk, we may periodically use financial instruments, including derivatives. All derivative financial instrument transactions must be authorized and executed pursuant to approval by the Board of Directors. As a matter of policy, we do not buy or sell financial instruments for speculative or trading purposes, and any such derivative financial instruments are intended to be used to reduce risk by hedging an underlying economic exposure. Our objective is to correlate derivative financial instruments and the underlying exposure being hedged, so that fluctuations in the value of the financial instruments are generally offset by reciprocal changes in the value of the underlying economic exposure. ​ Interest Rate Risk ​ We are exposed to changes in interest rates as a result of our short-term borrowings, long-term debt, and cash investments. We manage our interest rate risk through the strategic use of fixed and variable interest rate debt and, from time to time, derivative financial instruments. Currently, we are counterparty to certain interest rate swaps with a total notional amount of $350.0 million entered into in May 2021. These swaps are scheduled to mature in April 2030. Under the terms of these agreements, we swap fixed interest rates on a portion of our 2030 Senior Notes for compounded SOFR rates. In recent years, our principal interest rate exposure has been from outstanding borrowings under our Revolving Facility as well as our commercial paper program. As of January 31, 2025, we had no consolidated commercial paper borrowings and no borrowings outstanding under our Revolving Facility. For a detailed discussion of our Revolving Facility and our commercial paper program, see Note 5 to the consolidated financial statements. ​ A change in interest rates on variable rate debt impacts our pre-tax earnings and cash flows; whereas a change in interest rates on fixed rate debt impacts the economic fair value of debt but not our pre-tax earnings and cash flows. ​ At January 31, 2025, our primary interest rate exposure was from changes in interest rates on our variable rate investment holdings, which are classified as cash and cash equivalents in our consolidated financial statements. The increase in cash and cash equivalents was driven primarily from cash from operations. Based on our outstanding variable rate cash and debt balances as of January 31, 2025, the net annualized effect of a one percentage point decrease in interest rates would have resulted in a pre-tax reduction of our earnings and cash flows of approximately $3.5 million in 2024. ​ At February 2, 2024, our primary interest rate exposure was from changes in interest rates which affect our variable rate debt. Based on our outstanding variable rate debt as of February 2, 2024, after giving consideration to our interest rate swap agreements, the annualized effect of a one percentage point increase in variable interest rates would have resulted in a pretax reduction of our earnings and cash flows of approximately $3.5 million in 2023 . ​ 41 Table of Contents ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ​ Report of Independent Registered Public Accounting Fir m ​ To the Shareholders and the Board of Directors of Dollar General Corporation ​ Opinion on the Financial Statements ​ We have audited the accompanying consolidated balance sheets of Dollar General Corporation and subsidiaries (the Company) as of January 31, 2025 and February 2, 2024, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended January 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 31, 2025 and February 2, 2024, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2025, in conformity with U.S. generally accepted accounting principles. ​ We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 21, 2025, expressed an unqualified opinion thereon. ​ Basis for Opinion ​ These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ Critical Audit Matter ​ The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical 42 Table of Contents audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosure to which it relates. ​ ​ ​ Estimate of Workers’ Compensation and General Liability Reserves ​ ​ Description of the Matter The Company records expenses and reserves for workers’ compensation matters related to alleged work-related employee accidents and injuries, as well as general liability matters related to alleged non-employee incidents and injuries. At January 31, 2025, the Company’s reserves for self-insurance risks were $334.4 million, which includes workers’ compensation and general liability reserves. As discussed in Note 1 of the consolidated financial statements, the Company retains a significant portion of risk related to its workers’ compensation and general liability exposures. Accordingly, provisions are recorded for the Company’s estimates of such losses. The undiscounted future claim costs for the workers’ compensation and general liability exposures are estimated using actuarial methods. ​ Auditing management’s assessment of the recorded workers’ compensation and general liability self-insurance exposure reserves was complex and judgmental due to the significant assumptions required in projecting the exposure on incurred claims (including those which have not been reported to the Company). In particular, the estimate was sensitive to significant assumptions such as loss development factors, trend factors, and pure loss rates. ​ ​ How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s accounting for these self-insurance exposures. For example, we tested controls over the appropriateness of the assumptions management used in the calculation and the completeness and accuracy of the data underlying the reserves. ​ To test the Company’s determination of the estimated required workers’ compensation and general liability self-insurance reserves, we performed audit procedures that included, among others, assessing the actuarial valuation methodologies utilized by management, testing the significant assumptions discussed above, testing the completeness and accuracy of the underlying data used by the Company in its evaluation, and testing the mathematical accuracy of the calculations. We also compared the significant assumptions used by management to industry accepted actuarial assumptions, reassessed the accuracy of management’s historical estimates utilized in prior period evaluations, and utilized an actuarial valuation specialist to assist in assessing the valuation methodologies and significant assumptions used in the valuation analysis, as well as to compare the Company’s recorded reserve to an independently developed range of actuarial reserves. ​ ​ ​ ​ ​ /s/ Ernst & Young LLP ​ We have served as the Company’s auditor since 2001. Nashville, Tennessee March 21, 2025 ​ 43 Table of Contents DOLLAR GENERAL CORPORATION AND SUBSIDIARIES ​ CONSOLIDATED BALANCE SHEETS ​ (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 31, ​ February 2, ​ ​ ​ 2025 ​ 2024 ASSETS ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 932,576 ​ $ 537,283 ​ Merchandise inventories ​ 6,711,242 ​ 6,994,266 ​ Income taxes receivable ​ ​ 127,132 ​ ​ 112,262 ​ Prepaid expenses and other current assets ​ 392,975 ​ 366,913 ​ Total current assets ​ 8,163,925 ​ 8,010,724 ​ Net property and equipment ​ 6,209,481 ​ 6,087,722 ​ Operating lease assets ​ ​ 11,163,763 ​ ​ 11,098,228 ​ Goodwill ​ 4,338,589 ​ 4,338,589 ​ Other intangible assets, net ​ 1,199,700 ​ 1,199,700 ​ Other assets, net ​ 57,275 ​ 60,628 ​ Total assets ​ $ 31,132,733 ​ $ 30,795,591 ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ ​ Current portion of long-term obligations ​ $ 519,463 ​ $ 768,645 ​ Current portion of operating lease liabilities ​ ​ 1,460,114 ​ ​ 1,387,083 ​ Accounts payable ​ 3,833,133 ​ ​ 3,587,374 ​ Accrued expenses and other ​ 1,045,856 ​ ​ 971,890 ​ Income taxes payable ​ 10,136 ​ ​ 10,709 ​ Total current liabilities ​ 6,868,702 ​ 6,725,701 ​ Long-term obligations ​ 5,719,025 ​ 6,231,539 ​ Long-term operating lease liabilities ​ ​ 9,764,783 ​ ​ 9,703,499 ​ Deferred income taxes ​ 1,103,701 ​ 1,133,784 ​ Other liabilities ​ 262,815 ​ 251,949 ​ Commitments and contingencies ​ ​ ​ ​ ​ ​ ​ Shareholders’ equity: ​ ​ ​ ​ ​ ​ ​ Preferred stock ​ — ​ ​ — ​ Common stock; $ 0.875 par value, 1,000,000 shares authorized, 219,939 and 219,663 shares issued and outstanding at January 31, 2025 and February 2, 2024, respectively ​ 192,447 ​ 192,206 ​ Additional paid-in capital ​ 3,812,590 ​ 3,757,005 ​ Retained earnings ​ 3,405,683 ​ 2,799,415 ​ Accumulated other comprehensive income (loss) ​ 2,987 ​ 493 ​ Total shareholders’ equity ​ 7,413,707 ​ 6,749,119 ​ Total liabilities and shareholders' equity ​ $ 31,132,733 ​ $ 30,795,591 ​ ​ The accompanying notes are an integral part of the consolidated financial statements. ​ ​ 44 Table of Contents DOLLAR GENERAL CORPORATION AND SUBSIDIARIES ​ CONSOLIDATED S TATEMENTS OF INCOME ​ (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ January 31, February 2, February 3, ​ ​ 2025 ​ 2024 ​ 2023 Net sales ​ $ 40,612,308 ​ $ 38,691,609 ​ $ 37,844,863 ​ Cost of goods sold ​ 28,594,811 ​ 26,972,585 ​ 26,024,765 ​ Gross profit ​ 12,017,497 ​ 11,719,024 ​ 11,820,098 ​ Selling, general and administrative expenses ​ 10,303,423 ​ 9,272,724 ​ 8,491,796 ​ Operating profit ​ 1,714,074 ​ 2,446,300 ​ 3,328,302 ​ Interest expense, net ​ 274,320 ​ 326,781 ​ 211,273 ​ Other (income) expense ​ — ​ — ​ 415 ​ Income before income taxes ​ 1,439,754 ​ 2,119,519 ​ 3,116,614 ​ Income tax expense ​ 314,501 ​ 458,245 ​ 700,625 ​ Net income ​ $ 1,125,253 ​ $ 1,661,274 ​ $ 2,415,989 ​ Earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 5.12 ​ $ 7.57 ​ $ 10.73 ​ Diluted ​ $ 5.11 ​ $ 7.55 ​ $ 10.68 ​ Weighted average shares outstanding: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ 219,877 ​ 219,415 ​ 225,148 ​ Diluted ​ ​ 220,027 ​ 219,938 ​ 226,297 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividends per share ​ $ 2.36 ​ $ 2.36 ​ $ 2.20 ​ ​ The accompanying notes are an integral part of the consolidated financial statements. ​ ​ 45 Table of Contents DOLLAR GENERAL CORPORATION AND SUBSIDIARIES ​ CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ January 31, February 2, February 3, ​ 2025 ​ 2024 ​ 2023 Net income $ 1,125,253 ​ $ 1,661,274 ​ $ 2,415,989 ​ Unrealized net gain (loss) on hedged transactions and currency translation, net of related income tax expense (benefit) of ($ 11 ), $ 31 , and $ 353 , respectively 2,494 ​ 450 ​ 1,235 ​ Comprehensive income $ 1,127,747 ​ $ 1,661,724 ​ $ 2,417,224 ​ ​ The accompanying notes are an integral part of the consolidated financial statements. ​ ​ 46 Table of Contents DOLLAR GENERAL CORPORATION AND SUBSIDIARIES ​ CONSOLIDATED STATEMENTS OF SHAREHOLDE RS’ EQUITY ​ (In thousands except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ Common ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ ​ ​ ​ ​ Stock ​ Common ​ Paid-in ​ Retained ​ Comprehensive ​ ​ ​ ​ ​ Shares ​ Stock ​ Capital ​ Earnings ​ Income (Loss) ​ Total Balances, January 28, 2022 230,016 ​ $ 201,265 ​ $ 3,587,914 ​ $ 2,473,999 ​ $ ( 1,192 ) ​ $ 6,261,986 ​ Net income — ​ — ​ — ​ 2,415,989 ​ — ​ 2,415,989 ​ Dividends paid, $ 2.20 per common share ​ — ​ ​ — ​ ​ — ​ ​ ( 493,732 ) ​ ​ — ​ ​ ( 493,732 ) ​ Unrealized net gain (loss) on hedged transactions — ​ — ​ — ​ — ​ 1,235 ​ 1,235 ​ Share-based compensation expense — ​ — ​ 72,712 ​ — ​ — ​ 72,712 ​ Repurchases of common stock ( 11,643 ) ​ ( 10,188 ) ​ — ​ ( 2,737,826 ) ​ — ​ ( 2,748,014 ) ​ Excise tax incurred on common stock repurchases ​ — ​ ​ — ​ ​ — ​ ​ ( 2,290 ) ​ ​ — ​ ​ ( 2,290 ) ​ Other equity and related transactions 732 ​ 641 ​ 33,245 ​ — ​ — ​ 33,886 ​ Balances, February 3, 2023 219,105 ​ $ 191,718 ​ $ 3,693,871 ​ $ 1,656,140 ​ $ 43 ​ $ 5,541,772 ​ Net income — ​ — ​ — ​ 1,661,274 ​ — ​ 1,661,274 ​ Dividends paid, $ 2.36 per common share ​ — ​ ​ — ​ ​ — ​ ​ ( 517,999 ) ​ ​ — ​ ​ ( 517,999 ) ​ Unrealized net gain (loss) on hedged transactions and currency translation — ​ — ​ — ​ — ​ 450 ​ 450 ​ Share-based compensation expense — ​ — ​ 51,891 ​ — ​ — ​ 51,891 ​ Other equity and related transactions 558 ​ 488 ​ 11,243 ​ — ​ — ​ 11,731 ​ Balances, February 2, 2024 219,663 ​ $ 192,206 ​ $ 3,757,005 ​ $ 2,799,415 ​ $ 493 ​ $ 6,749,119 ​ Net income — ​ — ​ — ​ 1,125,253 ​ — ​ 1,125,253 ​ Dividends paid, $ 2.36 per common share ​ — ​ ​ — ​ ​ — ​ ​ ( 518,985 ) ​ ​ — ​ ​ ( 518,985 ) ​ Unrealized net gain (loss) on hedged transactions and currency translation — ​ — ​ — ​ — ​ 2,494 ​ 2,494 ​ Share-based compensation expense — ​ — ​ 58,738 ​ — ​ — ​ 58,738 ​ Other equity and related transactions 276 ​ 241 ​ ( 3,153 ) ​ — ​ — ​ ( 2,912 ) ​ Balances, January 31, 2025 219,939 ​ $ 192,447 ​ $ 3,812,590 ​ $ 3,405,683 ​ $ 2,987 ​ $ 7,413,707 ​ ​ The accompanying notes are an integral part of the consolidated financial statements. ​ ​ 47 Table of Contents DOLLAR GENERAL CORPORATION AND SUBSIDIARIES ​ CONSOLIDATED STATEMENTS OF CASH FLOWS ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ January 31, February 2, February 3, ​ 2025 ​ 2024 ​ 2023 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ 1,125,253 ​ $ 1,661,274 ​ $ 2,415,989 ​ Adjustments to reconcile net income to net cash from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization 971,703 ​ 848,793 ​ 724,877 ​ Deferred income taxes ( 30,345 ) ​ 72,847 ​ 235,299 ​ Noncash share-based compensation 58,738 ​ 51,891 ​ 72,712 ​ Other noncash (gains) and losses 296,184 ​ 88,982 ​ 530,530 ​ Change in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Merchandise inventories 230,208 ​ ( 299,066 ) ​ ( 1,665,352 ) ​ Prepaid expenses and other current assets ( 23,864 ) ​ ( 63,576 ) ​ ( 65,102 ) ​ Accounts payable 302,915 ​ 36,940 ​ ( 194,722 ) ​ Accrued expenses and other liabilities 91,813 ​ ( 39,189 ) ​ ( 25,409 ) ​ Income taxes ( 15,443 ) ​ 25,303 ​ ( 37,517 ) ​ Other ( 11,098 ) ​ 7,599 ​ ( 6,750 ) ​ Net cash provided by (used in) operating activities 2,996,064 ​ 2,391,798 ​ 1,984,555 ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchases of property and equipment ( 1,309,888 ) ​ ( 1,700,222 ) ​ ( 1,560,582 ) ​ Proceeds from sales of property and equipment 3,561 ​ 6,199 ​ 5,236 ​ Net cash provided by (used in) investing activities ( 1,306,327 ) ​ ( 1,694,023 ) ​ ( 1,555,346 ) ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of long-term obligations — ​ 1,498,260 ​ 2,296,053 ​ Repayments of long-term obligations ( 770,230 ) ​ ( 19,723 ) ​ ( 911,330 ) ​ Net increase (decrease) in commercial paper outstanding ​ — ​ ​ ( 1,501,900 ) ​ ​ 1,447,600 ​ Borrowings under revolving credit facilities — ​ 500,000 ​ — ​ Repayments of borrowings under revolving credit facilities — ​ ( 500,000 ) ​ — ​ Costs associated with issuance of debt ( 2,319 ) ​ ( 12,438 ) ​ ( 16,925 ) ​ Repurchases of common stock — ​ — ​ ( 2,748,014 ) ​ Payments of cash dividends ​ ( 518,983 ) ​ ​ ( 517,979 ) ​ ​ ( 493,726 ) ​ Other equity and related transactions ( 2,912 ) ​ 11,712 ​ 33,880 ​ Net cash provided by (used in) financing activities ( 1,294,444 ) ​ ( 542,068 ) ​ ( 392,462 ) ​ Net increase (decrease) in cash and cash equivalents 395,293 ​ 155,707 ​ 36,747 ​ Cash and cash equivalents, beginning of period 537,283 ​ 381,576 ​ 344,829 ​ Cash and cash equivalents, end of period $ 932,576 ​ $ 537,283 ​ $ 381,576 ​ Supplemental cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for: ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest $ 336,625 ​ $ 352,473 ​ $ 195,312 ​ Income taxes $ 354,727 ​ $ 359,578 ​ $ 500,814 ​ Supplemental noncash investing and financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Right of use assets obtained in exchange for new operating lease liabilities $ 1,592,510 ​ $ 1,804,934 ​ $ 1,836,718 ​ Purchases of property and equipment awaiting processing for payment, included in Accounts payable $ 90,981 ​ $ 148,137 ​ $ 150,694 ​ ​ The accompanying notes are an integral part of the consolidated financial statements. 48 Table of Contents DOLLAR GENERAL CORPORATION AND SUBSIDIARIES ​ NOTES TO CONSOLIDATED F INANCIAL STATEMENTS ​

1. Basis of presentation and accounting policies ​ Basis of presentation ​ These notes contain references to the years 2024, 2023, and 2022, which represent fiscal years ended January 31, 2025, February 2, 2024, and February 3, 2023, respectively. The Company’s 2024 and 2023 accounting periods were each comprised of 52 weeks, and the 2022 accounting period was comprised of 53 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 20,594 stores (as of January 31, 2025) in 48 U.S. states and Mexico with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States. As of January 31, 2025, the Company operated 20 distribution centers for non-refrigerated products, ten cold storage distribution centers, and four combination distribution centers which have both refrigerated and non-refrigerated products. The Company leases 15 of these facilities and the remainder are owned. ​ Cash and cash equivalents ​ Cash and cash equivalents include highly liquid investments with 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 $ 94.4  million and $ 109.3  million at January 31, 2025 and February 2, 2024, respectively. These receivables typically settle in less than five days with little or no default risk. ​ 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 $ 913.8  million and $ 875.1  million at January 31, 2025 and February 2, 2024, 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 $ 38.7 million in 2024, 49 Table of Contents $ 61.6  million in 2023, and $ 517.3  million in 2022, 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 11 % and 8 %, respectively, of the Company’s purchases in 2024. ​ Vendor rebates ​ The Company accounts for all cash consideration received from vendors in accordance with applicable accounting standards pertaining to such arrangements. Substantially all cash consideration received from a vendor 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. Depreciation and amortization expense is included in SG&A expenses as presented in the accompanying Consolidated Statements of Income, except depreciation and amortization expense related to assets used in the warehousing and distribution of goods which is capitalized into inventory and ultimately included in Cost of goods sold. Amounts included in the Company’s property and equipment balances and their estimated lives are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 31, February 2, (In thousands) ​ Life ​ 2025 ​ 2024 Land Indefinite ​ $ 265,202 ​ $ 236,899 ​ Land improvements ​ 20 ​ ​ 108,008 ​ 106,339 ​ Buildings 39

40 ​ 2,031,642 ​ 1,688,467 ​ Leasehold improvements ​ (a) ​ ​ 1,300,742 ​ 1,189,060 ​ Furniture, fixtures and equipment 3

10 ​ 7,128,287 ​ 6,604,870 ​ Construction in progress ​ ​ ​ ​ ​ 254,445 ​ 539,242 ​ Right of use assets - finance leases ​ Various ​ ​ 233,751 ​ ​ 233,349 ​ ​ ​ ​ ​ ​ ​ 11,322,077 ​ 10,598,226 ​ Less accumulated depreciation and amortization ​ ​ ​ ​ ​ ( 5,112,596 ) ​ ( 4,510,504 ) ​ Net property and equipment ​ ​ ​ ​ ​ $ 6,209,481 ​ $ 6,087,722 ​ (a) Depreciated over the lesser of the applicable lease term or the estimated useful life of the asset. ​ Depreciation and amortization expense related to property and equipment was approximately $ 963.8 million, $ 839.9 million and $ 717.8  million for 2024, 2023 and 2022, respectively. Interest on borrowed funds during the construction of property and equipment is capitalized where applicable. Interest costs of $ 14.6  million, $ 12.5 million, and $ 4.8  million were capitalized in 2024, 2023 and 2022, respectively. ​ Impairment of long-lived assets ​ Long-lived assets, including right of use assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The evaluation is performed primarily at the store level, which is the lowest level of identifiable cash flows that are largely independent of cash flows of other 50 Table of Contents assets and liabilities. 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 of 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 an asset group (typically considered a store) is found to be impaired, the amount recognized for impairment is equal to the difference between the carrying value and the asset group’s estimated fair value; however, no individual asset can be impaired below its individual fair value. The fair value for stores with ongoing operations is estimated based primarily upon estimated future cash flows over the asset’s remaining useful life, using the income approach (discounted at the Company’s credit adjusted risk-free rate) or other reasonable estimates of fair market value. The fair value of individual right of use assets which will continue to be utilized in the operations of stores is determined under the market approach using estimated market rent assessments based on market comps and broker quotes. For stores which will cease operations, fair value is estimated using an income-approach based on management's forecast of future cash flows expected to be derived from the property based on current sublease market rent (discounted at a rate reflective of a typical market participant’s required rate of return for similar properties). Assets to be disposed of are adjusted to the fair value less the cost to sell if less than the book value. ​ The determination of fair value under the income approach requires assumptions including forecasts of future cash flows (such as revenue growth rates and operating expenses) and selection of a market-based discount rate. Estimates of market rent are based on market comps and non-binding broker quotes. As these inputs are unobservable, they are classified as Level 3 inputs under the fair value hierarchy (see Note 6). If actual results are not consistent with estimates and assumptions used in estimating future cash flows and asset fair values, the Company may be exposed to additional impairment losses in a future period (see Note 12). ​ The Company recorded impairment charges included in SG&A expense of approximately $ 226.7  million in 2024, $ 6.7 million in 2023 and $ 2.1 million in 2022, to reduce the carrying value of certain of its stores’ assets. Impairment charges for 2024 included store asset and right of use asset impairment charges recorded in connection with the store portfolio optimization review as discussed in Note 12. Such action was deemed necessary based on the Company’s evaluation that such amounts would not be recoverable, 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 51 Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 31, February 2, (In thousands) ​ 2025 ​ 2024 Compensation and benefits ​ $ 171,318 ​ $ 145,665 ​ Self-insurance reserves ​ 165,085 ​ 151,317 ​ Taxes (other than taxes on income) ​ 310,568 ​ 275,636 ​ Other ​ 398,885 ​ 399,272 ​ ​ ​ $ 1,045,856 ​ $ 971,890 ​ ​ Included in other accrued expenses are liabilities for freight expense, interest, utilities, maintenance and legal settlements. ​ Supply chain finance programs ​ The Company utilizes supply chain finance programs whereby qualifying suppliers may elect at their sole discretion to sell the Company’s payment obligations to designated third party financial institutions. While the terms of these agreements are between the supplier and the financial institution, the supply chain finance financial institutions allow the participating suppliers to utilize the Company’s creditworthiness in establishing credit spreads and associated costs. The payment terms that the Company has with participating suppliers under these programs generally range up to 150 days . The Company’s obligations to its suppliers in accounts payable and accrued expenses , including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to finance amounts under these arrangements. As of January 31, 2025 and February 2, 2024, the amount of obligations outstanding that the Company has confirmed with the financial institutions under the supply chain finance program were $ 399.7 million and $ 306.8 million, respectively. ​ A summary of the Company’s supplier finance program activity is as follows: ​ ​ ​ ​ ​ (In thousands) 2024 Beginning balance, February 2, 2024 ​ $ 306,781 Amounts added ​ 1,285,484 Amounts settled ​ ( 1,192,586 ) Ending balance, January 31, 2025 ​ $ 399,679 ​ 52 Table of Contents Insurance liabilities ​ The Company retains a significant portion of risk for its workers’ compensation, employee health, general liability, property, auto liability 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 ​ Other liabilities primarily consist of self-insurance which equaled $ 169.3 million in 2024 and $ 156.6 million in 2023. ​ 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 53 Table of Contents 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 ​ Foreign currency denominated assets and liabilities held by foreign subsidiaries are translated into U.S. dollars using the spot rate in effect at the consolidated balance sheet date. Results of operations are translated using the average exchange rates in the period in which they occur. The effect of exchange rate fluctuations on translation of assets and liabilities is included as a component of shareholders’ equity in accumulated other comprehensive income or loss. ​ 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 was being amortized as an increase to interest expense over the 10-year period of the debt’s maturity, through 2023. ​ 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 $ 17.4  million and $ 13.8  million at January 31, 2025 and February 2, 2024, 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 $ 2.2 million, $ 2.6 million and $ 2.3 million in 2024, 2023 and 2022, 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 $ 122.9  million, $ 130.6 million and $ 126.0  million in 2024, 2023 and 2022, respectively. These costs primarily include promotional circulars, digital media support, and in-store signage. Vendor funding for cooperative advertising offset reported expenses by $ 41.6  million, $ 35.7 million and $ 33.4  million in 2024, 2023 and 2022, 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. ​ 54 Table of Contents 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 September 2022, the Financial Accounting Standards Board (“FASB”) issued new required disclosures for supplier finance programs. These disclosures are 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. The Company adopted the required disclosures for this accounting standard update in fiscal 2023, except for the disclosure of rollforward activity, which was adopted for fiscal year 2024. ​ In November 2023, the FASB issued an update to the required disclosures for segment reporting. The update is intended to improve reportable segment disclosures, primarily through enhanced disclosures about 55 Table of Contents significant segment expenses. The update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted the required disclosures for this update for fiscal year 2024. ​ In December 2023, the FASB issued an update to the required disclosures for income taxes. The update is intended to improve the rate reconciliation and income taxes paid disclosures to enhance the transparency and decision usefulness of income tax disclosures. The update is effective for fiscal years beginning after December 15, 2024. The Company is currently assessing the impact of the adoption of this required disclosure. ​ In November 2024, the FASB issued new required disclosures for disaggregated expense information. The update is intended to improve the disclosures about expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The update is effective for fiscal years beginning after December 15, 2026. The Company is currently assessing the impact of the adoption of this required disclosure. ​ 2. Earnings per share ​ Earnings per share is computed as follows (in thousands except per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ ​ ​ Weighted ​ ​ ​ ​ Net ​ Average ​ Per Share ​ ​ ​ Income ​ Shares ​ Amount ​ Basic earnings per share ​ $ 1,125,253 219,877 ​ $ 5.12 ​ Effect of dilutive share-based awards ​ ​ ​ 150 ​ ​ ​ ​ Diluted earnings per share ​ $ 1,125,253 220,027 ​ $ 5.11 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ ​ ​ ​ Weighted ​ ​ ​ ​ Net ​ Average ​ Per Share ​ ​ ​ Income ​ Shares ​ Amount ​ Basic earnings per share ​ $ 1,661,274 219,415 ​ $ 7.57 ​ Effect of dilutive share-based awards ​ ​ ​ 523 ​ ​ ​ ​ Diluted earnings per share ​ $ 1,661,274 219,938 ​ $ 7.55 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ ​ 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 0.2  million, 0.1 million and 0.1  million in 2024, 2023 and 2022, respectively. ​ 56 Table of Contents 3. Income taxes ​ The provision (benefit) for income taxes consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) 2024 2023 2022 Current: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 296,598 ​ $ 324,339 ​ $ 400,752 ​ Foreign ​ 422 ​ 880 ​ 279 ​ State ​ 47,878 ​ 59,181 ​ 63,562 ​ ​ ​ 344,898 ​ 384,400 ​ 464,593 ​ Deferred: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ ( 24,547 ) ​ 72,769 ​ 195,529 ​ Foreign ​ ​ 4 ​ ​ ( 297 ) ​ ​ ( 24 ) ​ State ​ ( 5,854 ) ​ 1,373 ​ 40,527 ​ ​ ​ ( 30,397 ) ​ 73,845 ​ 236,032 ​ ​ ​ $ 314,501 ​ $ 458,245 ​ $ 700,625 ​ ​ 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) ​ 2024 ​ 2023 ​ 2022 U.S. federal statutory rate on earnings before income taxes $ 302,349 21.0 % $ 445,098 21.0 % $ 654,489 21.0 % State income taxes, net of federal income tax benefit ​ 33,270 2.3 ​ 47,855 2.2 ​ 82,134 2.6 ​ Jobs credits, net of federal income taxes ​ ( 33,345 ) ( 2.3 ) ​ ( 34,279 ) ( 1.6 ) ​ ( 37,639 ) ( 1.2 ) ​ Other, net ​ 12,227 0.8 ​ ( 429 ) — ​ 1,641 0.1 ​ ​ ​ $ 314,501 21.8 % $ 458,245 21.6 % $ 700,625 22.5 % ​ The effective income tax rate for 2024 was 21.8 % compared to a rate of 21.6 % for 2023 which represents a net increase of 0.2 percentage points. The effective income tax rate was higher in 2024 primarily due to a higher state effective tax rate and a decreased benefit from stock-based compensation partially offset by the effect of certain rate-impacting items on lower earnings before taxes. ​ The effective income tax rate for 2023 was 21.6 % compared to a rate of 22.5 % for 2022 which represents a net decrease of 0.9 percentage points. The effective income tax rate was lower in 2023 primarily due to the effect of certain rate-impacting items (such as federal tax credits) on lower earnings before taxes and a lower state effective rate resulting from increased recognition of state tax credits. ​ 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: 57 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 31, February 2, (In thousands) ​ 2025 ​ 2024 Deferred tax assets: ​ ​ ​ ​ ​ ​ ​ Deferred compensation expense ​ $ 12,914 ​ $ 13,441 ​ Accrued expenses ​ 14,586 ​ 13,112 ​ Accrued rent ​ 195 ​ 306 ​ Lease liabilities ​ ​ 2,864,218 ​ ​ 2,852,395 ​ Accrued insurance ​ 10,200 ​ 8,732 ​ Accrued incentive compensation ​ 10,605 ​ 5,356 ​ Share based compensation ​ ​ 19,006 ​ ​ 17,052 ​ Tax benefit of income tax and interest reserves related to uncertain tax positions ​ 1,155 ​ 1,028 ​ State and foreign tax net operating loss carry forwards, net of federal tax ​ 18,984 ​ 9,781 ​ State tax credit carry forwards, net of federal tax ​ 16,187 ​ 19,463 ​ Other ​ 21,368 ​ 22,882 ​ ​ ​ 2,989,418 ​ 2,963,548 ​ Less valuation allowances, net of federal income taxes ​ ( 22,975 ) ​ ( 17,000 ) ​ Total deferred tax assets ​ 2,966,443 ​ 2,946,548 ​ Deferred tax liabilities: ​ ​ ​ ​ ​ ​ ​ Property and equipment ​ ( 707,318 ) ​ ( 736,322 ) ​ Lease assets ​ ​ ( 2,806,870 ) ​ ​ ( 2,815,466 ) ​ Inventories ​ ( 224,933 ) ​ ( 199,603 ) ​ Trademarks ​ ( 304,673 ) ​ ( 306,915 ) ​ Prepaid insurance ​ ​ ( 24,874 ) ​ ​ ( 20,275 ) ​ Other ​ ( 1,213 ) ​ ( 1,751 ) ​ Total deferred tax liabilities ​ ( 4,069,881 ) ​ ( 4,080,332 ) ​ Net deferred tax liabilities ​ $ ( 1,103,438 ) ​ $ ( 1,133,784 ) ​ ​ The Company has state tax credit carryforwards of approximately $ 16.2  million (net of federal benefit) that will expire beginning in 2028 through 2048. The Company has approximately $ 2.9 million of state apportioned net operating loss carryforwards, which will begin to expire in 2036 and will continue through 2041 and approximately $ 63.0 million of foreign net operating loss carryforwards, which will begin to expire in 2032 through 2034. ​ The Company has a valuation allowance for certain state tax credit carryforwards and foreign net operating loss carryforwards and deferred tax assets, in the amount of $ 23.0 million and $ 17.0 million (net of federal benefit) which increased income tax expense by $ 6.0 million and $ 8.0 million in 2024 and 2023, respectively. Management believes that the results from operations will not generate sufficient taxable income to realize the state deferred tax assets before they expire and, with respect to the foreign deferred tax assets, will assess the existing positive and negative evidence in evaluating a potential release of the valuation allowance on the deferred tax assets in future periods. ​ 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 2020 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 2021 through 2023 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 2021 and later tax years remain open for examination by the various state taxing authorities. ​ As of January 31, 2025, accruals for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $ 11.6 million, $ 1.7 million and $ 0.8 million, respectively, for a total of $ 14.1 million. As of February 2, 2024, accruals for uncertain tax benefits, interest expense related to income taxes and potential income tax penalties were $ 14.4 million, $ 1.0 million and $ 0.0 million, respectively, for a total of $ 15.4 million. These totals are reflected in noncurrent Other liabilities in the consolidated balance sheets. 58 Table of Contents ​ The Company’s reserve for uncertain tax positions is expected to be reduced by $ 3.5 million in the coming twelve months as a result of expiring statutes of limitations or settlements. As of January 31, 2025 and February 2, 2024, approximately $ 11.6  million and $ 11.5 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) 2024 2023 2022 Income tax expense (benefit) ​ $ 163 ​ $ 3,930 ​ $ 1,797 ​ Income tax related interest expense (benefit) ​ 773 ​ 710 ​ 28 ​ Income tax related penalty expense (benefit) ​ 826 ​ — ​ — ​ ​ A reconciliation of the uncertain income tax positions from January 28, 2022 through January 31, 2025 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) 2024 2023 2022 Beginning balance ​ $ 14,377 ​ $ 7,988 ​ $ 6,191 ​ Increases—tax positions taken in the current year ​ 189 ​ 665 ​ — ​ Increases—tax positions taken in prior years ​ 4,893 ​ 8,101 ​ 3,499 ​ Decreases—tax positions taken in prior years ​ ( 5,722 ) ​ — ​ — ​ Statute expirations ​ ( 2,111 ) ​ ( 1,931 ) ​ ( 1,239 ) ​ Settlements ​ — ​ ( 446 ) ​ ( 463 ) ​ Ending balance ​ $ 11,626 ​ $ 14,377 ​ $ 7,988 ​ ​ The Organization of Economic Cooperation and Development has proposed a global minimum tax of 15% on a country-by-country basis (“Pillar Two”). Pursuant to Pillar Two, some countries have enacted minimum tax rates of 15% effective for the 2024 tax year while other countries have enacted or proposed legislation making the 15% minimum tax rate effective for the 2025 tax year or later. The Company operates in a country that is currently assessing the enactment of the 15% minimum tax rate beginning in 2025. If enacted, the Company does not believe it will have a material impact on tax expense. ​ 4. Leases ​ As of January 31, 2025, 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 carry a primary lease term of up to 15 years . 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 January 31, 2025, the weighted-average remaining lease term for the Company’s leases was 9.4 years, and the weighted average discount rate was 4.5 %. For 2024, 2023 and 2022, operating lease cost of $ 1.89 billion, $ 1.75 billion and $ 1.61 billion, respectively, and variable lease cost of $ 0.39 billion, $ 0.36 billion and $ 0.31 billion, respectively, were reflected as SG&A expenses in the Consolidated Statements of Income. Cash paid for 59 Table of Contents amounts included in the measurement of operating lease liabilities of $ 1.91 billion, $ 1.76 billion and $ 1.62 billion, respectively, were reflected in cash flows from operating activities in the Consolidated Statements of Cash Flows for 2024, 2023 and 2022. ​ The scheduled maturities of the Company’s operating lease liabilities are as follows: ​ ​ ​ ​ ​ ​ (In thousands) ​ ​ 2025 ​ $ 1,921,426 ​ 2026 ​ 1,826,594 ​ 2027 ​ 1,694,935 ​ 2028 ​ 1,524,602 ​ 2029 ​ 1,322,309 ​ Thereafter ​ 5,471,916 ​ Total lease payments (a) ​ ​ 13,761,782 ​ Less imputed interest ​ ​ ( 2,536,885 ) ​ Present value of lease liabilities ​ $ 11,224,897 ​ a) Excludes approximately $ 322.5 million of legally binding minimum lease payments for leases signed which have not yet commenced . ​ ​ 5. Current and long-term obligations ​ Consolidated current and long-term obligations consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 31, February 2, (In thousands) ​ 2025 ​ 2024 Revolving Facility ​ $ — ​ $ — ​ 364-Day Revolving Facility ​ ​ — ​ ​ — ​ Unsecured commercial paper notes ​ ​ — ​ ​ — ​ 4.250 % Senior Notes due September 20, 2024 (net of discount of $ 0 and $ 230 ) ​ ​ — ​ ​ 749,770 ​ 4.150 % Senior Notes due November 1, 2025 (net of discount of $ 71 and $ 162 ) ​ ​ 499,929 ​ ​ 499,838 ​ 3.875 % Senior Notes due April 15, 2027 (net of discount of $ 112 and $ 160 ) ​ ​ 599,888 ​ ​ 599,840 ​ 4.625 % Senior Notes due November 1, 2027 (net of discount of $ 300 and $ 400 ) ​ ​ 549,700 ​ ​ 549,600 ​ 4.125 % Senior Notes due May 1, 2028 (net of discount of $ 184 and $ 237 ) ​ ​ 499,816 ​ ​ 499,763 ​ 5.200 % Senior Notes due July 5, 2028 (net of discount of $ 99 and $ 124 ) ​ ​ 499,901 ​ ​ 499,876 ​ 3.500 % Senior Notes due April 3, 2030 (net of discount of $ 376 and $ 441 ) ​ ​ 953,108 ​ ​ 951,240 ​ 5.000 % Senior Notes due November 1, 2032 (net of discount of $ 1,955 and $ 2,155 ) ​ ​ 698,045 ​ ​ 697,845 ​ 5.450 % Senior Notes due July 5, 2033 (net of discount of $ 1,396 and $ 1,521 ) ​ ​ 998,604 ​ ​ 998,479 ​ 4.125 % Senior Notes due April 3, 2050 (net of discount of $ 4,571 and $ 4,670 ) ​ ​ 495,429 ​ ​ 495,330 ​ 5.500 % Senior Notes due November 1, 2052 (net of discount of $ 284 and $ 288 ) ​ ​ 299,716 ​ ​ 299,712 ​ Other ​ ​ 181,076 ​ ​ 200,418 ​ Debt issuance costs, net ​ ( 36,724 ) ​ ( 41,527 ) ​ ​ ​ $ 6,238,488 ​ $ 7,000,184 ​ Less: current portion ​ ( 519,463 ) ​ ( 768,645 ) ​ Long-term obligations ​ $ 5,719,025 ​ $ 6,231,539 ​ ​ Revolving Facility ​ On September 3, 2024, the Company entered into an amended and restated credit agreement which provides for a $ 2.375 billion unsecured five-year revolving credit facility (the “Revolving Facility”) and allows for a subfacility for letters of credit of up to $ 100 million, of which $ 70 million is currently committed. The Revolving Facility is scheduled to mature on September 3, 2029. ​ 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 60 Table of Contents 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 January 31, 2025 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 January 31, 2025, 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 credit agreement governing the Revolving Facility contains a number of customary affirmative and negative covenants that, among other things, restrict, subject to certain exceptions, the Company’s 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 credit agreement governing the Revolving Facility also contains financial covenants which require the maintenance of a minimum fixed charge coverage ratio and a maximum leverage ratio. As of January 31, 2025, the Company was in compliance with all such covenants. On March 11, 2025, the Company amended the credit agreement governing the Revolving Facility to increase the maximum leverage ratio and decrease the minimum fixed charge ratio until January 30, 2026, or earlier at the Company’s option upon achieving certain financial covenant milestones (“Covenant Relief Period”). During the Covenant Relief Period, the Company is restricted from repurchasing shares and the ability to incur certain additional liens and subsidiary debt is reduced. The credit agreement governing the Revolving Facility also contains customary events of default. ​ As of January 31, 2025, the Company had no outstanding borrowings, no outstanding letters of credit, and borrowing availability of $ 2.375  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 $ 2.18  billion. In addition, the Company had outstanding letters of credit of $ 50.9  million which were issued pursuant to separate agreements. ​ 364-Day Revolving Facility ​ The Company had a 364-day $ 750 million unsecured revolving credit facility (the “364-Day Revolving Facility”) which expired on January 30, 2024. ​ Commercial Paper ​ As of January 31, 2025, 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 January 31, 2025, the Company’s consolidated balance sheet reflected no outstanding CP Notes. CP Notes totaling $ 195.0 million were held by a wholly-owned subsidiary of the Company and are therefore not reflected on the consolidated balance sheets. ​ Senior Notes ​ On June 7, 2023, the Company issued $ 500.0 million aggregate principal amount of 5.20 % senior notes due 2028 (the “July 2028 Senior Notes”), net of discount of $ 0.1 million, and $ 1.0 billion aggregate principal amount of 5.45 % senior notes due 2033 (the “2033 Senior Notes”), net of discount of $ 1.6 million. The July 2028 Senior Notes are scheduled to mature on July 5, 2028, and the 2033 Senior Notes are scheduled to mature on July 5, 2033. Interest on the July 2028 Senior Notes and the 2033 Senior Notes is payable in cash on January 5 and July 5 of each year. The Company incurred $ 12.4 million of debt issuance costs associated with the issuance of the July 2028 Senior Notes and the 2033 Senior Notes. ​ In September 2024, the Company redeemed $ 750.0 million aggregate principal amount of outstanding 61 Table of Contents 4.25 % senior notes due September 2024. There was no gain or loss associated with the redemption. ​ Collectively, the Company’s Senior Notes mature between 2024 and 2052 (collectively, 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. ​ Scheduled debt maturities at January 31, 2025 for the Company’s fiscal years listed below are as follows: ​ ​ ​ ​ ​ ​ (In thousands) ​ ​ 2025 ​ $ 519,463 ​ 2026 ​ 17,473 ​ 2027 ​ 1,165,843 ​ 2028 ​ 1,015,161 ​ 2029 ​ 8,507 ​ Thereafter ​ 3,604,629 ​ Total ​ ​ 6,331,076 ​ ​ ​ 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 January 31, 2025, 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 ​ January 31, ​ (In thousands) ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ 2025 ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current and long-term obligations (a) ​ $ 5,852,323 ​ $ 181,076 ​ $ — ​ $ 6,033,399 ​ Deferred compensation (b) ​ 49,703 ​ — ​ — ​ 49,703 ​ (a) Included in the consolidated balance sheet at book value as current portion of long-term obligations of $ 519,463 and long-term obligations of $ 5,719,025 . (b) Reflected at fair value in the consolidated balance sheet as a component of accrued expenses and other current liabilities of $ 4,876 and a component of noncurrent other liabilities of $ 44,827 . ​ 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 January 31, 2025. ​ 62 Table of Contents Certain assets and liabilities are measured at fair value on a nonrecurring basis. These include assets for which impairments were recorded. The Company reviewed store assets for indicators of impairment. 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. These measures of fair value, and related inputs, are considered a Level 3 approach under the fair value hierarchy. Refer to Note 1 and Note 12 for further information regarding the impairment charges recorded. ​ ​ 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 condensed 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 November 27, 2023, and November 30, 2023, respectively, the following putative shareholder class action lawsuits were filed in the United States District Court for the Middle District of Tennessee in which the plaintiffs allege that during the putative class periods noted below, the Company and certain of its current and former officers violated the federal securities laws by misrepresenting the impact of alleged store labor, inventory, pricing and other practices on the Company’s financial results and prospects: Washtenaw County Employees’ Retirement System v. Dollar General Corporation, et al. (Case No. 3:23-cv-01250) (putative class period of May 28, 2020 to August 30, 2023) ( “Washtenaw County” ); Robert J. Edmonds v. Dollar General Corporation, et al. (Case No. 3:23-cv-01259) (putative class period of February 23, 2023 to August 31, 2023) ( “Edmonds” ) (collectively, the “Shareholder Securities Litigation” ). The plaintiffs seek compensatory damages, equitable/injunctive relief, pre- and post-judgment interest and attorneys’ fees and costs. The Edmonds matter was voluntarily dismissed on January 19, 2024. On April 4, 2024, the court appointed lead plaintiffs and lead counsel in the Shareholder Securities Litigation . On June 17, 2024, lead plaintiffs filed a consolidated amended complaint, adding a claim that lead plaintiffs and certain members of the putative class purchased shares of the Company’s common stock contemporaneously with common stock sales by certain individual defendants. On October 17, 2024, lead plaintiffs filed a second consolidated amended complaint, expanding the putative class period to cover May 28, 2020 to August 28, 2024. On November 15, 2024, Defendants moved to dismiss the second consolidated amended complaint, and briefing on Defendants’ motion has been completed. ​ At this time, it is not possible to estimate the value of the claims asserted in the Shareholder Securities Litigation or the potential range of loss in this matter, and no assurances can be given that the Company will be successful in its defense on the merits or otherwise. However, if the Company is not successful in its defense efforts, the resolution of the Shareholder Securities Litigation could have a material adverse effect on the Company’s consolidated financial statements as a whole. ​ On January 26 and 29, 2024, and February 1, 2024, respectively, the following shareholder derivative actions were filed in the United States District Court for the Middle District of Tennessee in which the plaintiff shareholders, purportedly on behalf and for the benefit of the Company, allege that certain of the Company’s current and former officers and directors (i) violated their fiduciary duties by misrepresenting the impact of alleged store labor, inventory pricing, and other practices on the Company’s financial results, prospects, and reputation, as well as creating a risk of adverse regulatory action; (ii) wasted corporate assets; and (iii) were unjustly enriched: Nathan Silva v. Todd J. Vasos, et. al. (Case No. 3:24-cv-00083) ( “Silva” ); Terry Dunn v. Todd J. Vasos, et. al. (Case No. 3:24-cv-00093) ( “Dunn” ); Kathryn A. Caliguiri Inh Ira Bene Of Catherine Sugarbaker v. Todd J. Vasos, et. al. (Case No. 3:24-cv-00117) ( “Caliguiri” ) (collectively, the “Federal Court Shareholder Derivative Litigation” ). The Silva complaint also alleges certain of the Company’s current and former officers and directors violated federal securities laws and aided and abetted breach of fiduciary duty and that Mr. Vasos violated his fiduciary duties by misusing material, non-public information. The Dunn and Caliguiri complaints additionally allege that certain of the Company’s officers and directors violated their fiduciary duties by recklessly or negligently disregarding workplace safety practices, and that Mr. Vasos, John Garratt and Patricia Fili-Krushel violated their fiduciary duties 63 Table of Contents by misusing material, non-public information. The plaintiffs in the Federal Court Shareholder Derivative Litigation seek both non-monetary and monetary relief for the benefit of the Company. On April 2, 2024, the court consolidated the Silva, Dunn, and Caliguiri actions. On May 2, 2024, the Silva action was dismissed. On May 22, 2024, the court entered an order staying the Dunn and Caliguiri actions pending resolution of the defendants’ anticipated motion to dismiss in the Shareholder Securities Litigation . ​ On March 26, 2024 and March 28, 2024, respectively, the following shareholder derivative actions were filed in the Chancery Court for Davidson County, Tennessee: Todd Hellrigel v. Todd J. Vasos et al. (Case No. 24-0392-I) ( “Hellrigel" ); Steve Southwell v. Todd Vasos, et al. (Case No. 24-0379-I) ( “Southwell” ) (collectively, the “State Court Shareholder Derivative Litigation” ). The claims in the State Court Shareholder Derivative Litigation include allegations that certain of the Company’s current and former officers and directors (i) violated their fiduciary duties by misrepresenting the impact of alleged store labor, inventory pricing and other practices on the Company’s financial results, prospects, and reputation, as well as creating a risk of adverse regulatory action; (ii) were unjustly enriched; and (iii) that Mr. Vasos, Mr. Garratt, Warren Bryant, and Ms. Fili-Krushel violated their fiduciary duties by misusing material, non-public information. The relief sought is substantially the same as the relief sought in the Federal Court Derivative Shareholder Litigation . On May 20, 2024, the court entered an agreed order consolidating the Hellrigel and Southwell actions, appointing lead counsel, and staying the State Court Shareholder Derivative Litigation pending resolution of defendants’ anticipated motion to dismiss the Shareholder Securities Litigation . ​ 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. ​ 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 2024, 2023 and 2022, the Company expensed approximately $ 38.2  million, $ 35.9  million and $ 35.7  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 $ 0.7  million in 2024, $ 1.0 million in 2023 and $ 1.2 million in 2022. ​ The deferred compensation liability associated with the CDP/SERP Plan is reflected in the consolidated balance sheets as further disclosed in Note 6. ​ 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 64 Table of Contents 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-year period. The number of performance share units earned are based on performance criteria measured over a period of one to three years , and such awards generally vest over a three-year period. With limited exceptions, the performance share unit and restricted stock unit awards are payable in shares of common stock on the vesting date. ​ The weighted average for key assumptions used in determining the fair value of all stock options granted in the years ended January 31, 2025, February 2, 2024, and February 3, 2023, and a summary of the methodology applied to develop each assumption, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 31, February 2, February 3, ​ ​ 2025 ​ 2024 ​ 2023 Expected dividend yield 1.6 % 1.5 % 1.0 % Expected stock price volatility 30.4 % 27.7 % 25.4 % Weighted average risk-free interest rate 4.1 % 4.1 % 2.4 % Expected term of options (years) 4.7 ​ 4.7 ​ 4.8 ​ ​ 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 January 31, 2025 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Remaining ​ ​ ​ ​ Options ​ Exercise ​ Contractual ​ Intrinsic (Intrinsic value amounts reflected in thousands) ​ Issued ​ Price ​ Term in Years ​ Value Balance, February 2, 2024 2,413,642 ​ $ 164.21 ​ ​ ​ ​ ​ ​ Granted 891,666 ​ 148.85 ​ ​ ​ ​ ​ ​ Exercised ( 101,719 ) ​ 100.04 ​ ​ ​ ​ ​ ​ Canceled or expired ( 243,651 ) ​ 178.65 ​ ​ ​ ​ ​ ​ Balance, January 31, 2025 2,959,938 ​ $ 160.60 6.7 ​ $ 28,020 ​ Exercisable at January 31, 2025 1,366,006 ​ $ 159.59 4.6 ​ $ 28,020 ​ ​ The weighted average grant date fair value per share of options granted was $ 42.06 , $ 44.97 and $ 52.06 during 2024, 2023 and 2022, respectively. The intrinsic value of options exercised during 2024, 2023 and 2022, was $ 4.8 million, $ 19.0  million and $ 62.7  million, respectively. ​ 65 Table of Contents 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 January 31, 2025 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Units Intrinsic (Intrinsic value amounts reflected in thousands) ​ Issued ​ Value Balance, February 2, 2024 174,160 ​ ​ ​ ​ Granted 70,010 ​ ​ ​ ​ Converted to common stock ( 115,251 ) ​ ​ ​ ​ Canceled ( 57,189 ) ​ ​ ​ ​ Balance, January 31, 2025 71,730 ​ $ 5,097 ​ ​ All performance share unit awards at January 31, 2025 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 $ 154.21 , $ 208.13  and $ 214.25  during 2024, 2023 and 2022, respectively. ​ A summary of restricted stock unit award activity during the year ended January 31, 2025 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Units Intrinsic (Intrinsic value amounts reflected in thousands) ​ Issued ​ Value Balance, February 2, 2024 370,463 ​ ​ ​ ​ Granted 507,975 ​ ​ ​ ​ Converted to common stock ( 144,713 ) ​ ​ ​ ​ Canceled ( 91,765 ) ​ ​ ​ ​ Balance, January 31, 2025 641,960 ​ $ 45,618 ​ ​ The weighted average grant date fair value per share of restricted stock units granted was $ 130.78 , $ 193.78 and $ 223.51 during 2024, 2023 and 2022, respectively. ​ At January 31, 2025, the total unrecognized compensation cost related to unvested stock-based awards was $ 85.5 million with an expected weighted average expense recognition period of 1.9 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 January 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pre-tax ​ $ 21,137 ​ $ 970 ​ $ 36,631 ​ $ 58,738 ​ Net of tax ​ $ 16,529 ​ $ 759 ​ $ 28,645 ​ $ 45,933 ​ Year ended February 2, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pre-tax ​ $ 19,400 ​ $ 1,732 ​ $ 30,759 ​ $ 51,891 ​ Net of tax ​ $ 15,210 ​ $ 1,358 ​ $ 24,115 ​ $ 40,683 ​ 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 ​ ​ ​ 66 Table of Contents 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 January 31, 2025, the Company’s retail store operations were primarily located within the United States, with eight retail stores in Mexico. 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) 2024 2023 2022 Classes of similar products: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumables ​ $ 33,370,910 ​ $ 31,342,595 ​ $ 30,155,218 ​ Seasonal ​ 4,073,317 ​ 4,083,790 ​ 4,182,815 ​ Home products ​ 2,074,379 ​ 2,163,806 ​ 2,332,411 ​ Apparel ​ 1,093,702 ​ 1,101,418 ​ 1,174,419 ​ Net sales ​ $ 40,612,308 ​ $ 38,691,609 ​ $ 37,844,863 ​ ​ ​ The Company’s Chief Operating Decision maker (“CODM”) is the Chief Executive Officer. The measure of profit or loss utilized by the CODM in assessing segment performance and allocating resources is net income as presented on the Company’s Consolidated Statements of Income. The measure of segment assets is reported on the balance sheet as total consolidated assets. Net income is used to evaluate income generated from the use of segment assets which aids in the determination of the allocation of Company resources. Net income is also utilized to monitor budget versus actual results. The following is a reconciliation of segment revenue and significant segment expenses to net income, the measure of profit or loss: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) 2024 2023 2022 Net sales ​ $ 40,612,308 ​ $ 38,691,609 ​ $ 37,844,863 ​ Less: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shrink included in cost of goods sold ​ 928,896 ​ 910,674 ​ 481,011 ​ Cost of goods sold, excluding shrink(b) ​ 27,665,915 ​ 26,061,911 ​ 25,543,754 ​ Interest expense, net ​ ​ 274,320 ​ ​ 326,781 ​ ​ 211,273 ​ Income tax expense ​ ​ 314,501 ​ ​ 458,245 ​ ​ 700,625 ​ Other segment items (a)(b) ​ 10,303,423 ​ 9,272,724 ​ 8,492,211 ​ Consolidated net income ​ $ 1,125,253 ​ $ 1,661,274 ​ $ 2,415,989 ​ ​ (a) Other segment items include all remaining SG&A expenses and other (income) expense as disclosed in the Consolidated Statements of Income which were not deemed individually significant for disclosure. These expense items include rent expense as disclosed in Note 4 as well as advertising costs and impairment expense as disclosed in Note 1. (b) Depreciation and amortization expense included in Cost of goods sold and SG&A expenses was approximately $ 971.7 million, $ 848.8 million and $ 724.9 million for 2024, 2023 and 2022. ​ 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 67 Table of Contents agreements, cash requirements, excess debt capacity, results of operations, financial condition and other factors. Repurchases under the program may be funded from available cash or borrowings including under the Company’s Revolving Facility and issuance of CP Notes discussed in further detail in Note 5. ​ During the years ended January 31, 2025 and February 2, 2024, the Company repurchased no shares of its common stock. During the year ended February 3, 2023, the Company repurchased 11.6  million shares of its common stock at a total cost of $ 2.7  billion, pursuant to its common stock repurchase program. ​ In March 2025, the Company’s Board of Directors declared a quarterly cash dividend of $ 0.59 per share, which is payable on or before April 22, 2025 to shareholders of record on April 8, 2025. The Company paid quarterly cash dividends of $ 0.59 per share in 2024. 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, excess debt capacity and other factors that the Board may deem relevant in its sole discretion. ​ 12. Store Portf olio Optimization, Impairment and Related Charges ​ During the fourth quarter of 2024, the Company initiated a store portfolio optimization review which involved identifying stores with indicated impairment and identifying stores for closure based on an evaluation of current market conditions and individual store performance, among other factors. The following table provides a summary of the impairment costs included in the consolidated statements of operations: ​ ​ ​ (In thousands) ​ ​ 2024 Store closure impairment ​ $ 95,257 Impairment of long-lived assets ​ ​ 118,912 Total store portfolio optimization and impairment charges ​ $ 214,169 ​ Store closures . As a result of the fourth quarter store portfolio optimization review, the Company determined it would permanently close 141 stores ( 96 Dollar General and 45 pOpshelf stores) in the first quarter of fiscal 2025. Accordingly, the Company recognized impairment charges in SG&A expenses in the Consolidated Statements of Income and in Other noncash (gains) and losses in Consolidated Statements of Cash Flows. The impairment charges reduced the carrying value of the assets to their estimated fair value. The operating lease right of use asset impairment does not relieve the Company of its monthly cash payment obligations under the lease. Fair value was estimated using an income-approach based on management's forecast of future cash flows expected to be derived from the property based on current sublease market rent. In addition, the Company recorded $ 17.9  million of inventory markdowns within Cost of goods sold in the accompanying Consolidated Statements of Income for the stores expected to close in the first quarter of fiscal 2025. ​ Impairment of long-lived tangible and right-of-use assets . As a result of the impairment analysis performed in the fourth quarter, the Company recognized impairment charges related to certain retail stores, mostly related to pOpshelf stores. for the fiscal year ended January 31, 2025. These impairment charges were primarily driven by lower projected future revenues and lower market rate assessments. ​ ​ 68 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ​ Not applicable. ​ ITEM 9A. CONTROLS AND PROCEDURES ​ (a) Disclosure Controls and Procedures. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. ​ (b) Management’s Annual Report on Internal Control Over Financial Reporting. Our management prepared and is responsible for the consolidated financial statements and all related financial information contained in this report. This responsibility includes establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with United States generally accepted accounting principles. ​ To comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, management designed and implemented a structured and comprehensive assessment process to evaluate the effectiveness of its internal control over financial reporting. Such assessment was based on criteria established in Internal Control—Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Management regularly monitors our internal control over financial reporting, and actions are taken to correct any deficiencies as they are identified. Based on its assessment, management has concluded that our internal control over financial reporting is effective as of January 31, 2025. ​ Ernst & Young LLP, the independent registered public accounting firm that audited our consolidated financial statements, has issued an attestation report on our internal control over financial reporting. Such attestation report is contained below. ​ ​ ​ 69 Table of Contents (c) Attestation Report of Independent Registered Public Accounting Firm. ​