Subject: Re: CEO Todd Vasos

DG (Dollar General Corporation): Vasos Reinstated as CEO; Sounds Good on the Surface, but Caution Warranted; Remain Sidelined (EW; PT: $110): DG surprisingly announced the reinstatement of Todd Vasos as CEO. While we are pleased to see change, DG's issues run deeper than Owens, it's still unclear if action will be aggressive enough, and the ultimate fix seems costly. We remain EW and reduce PT to $110 (from $145). The board's decision to replace Jeff Owens with former CEO Todd Vasos is likely to be well-received by investors. Vasos is highly regarded and has a history of success at DG. But we recommend some caution. Vasos only retired last November, served as an adviser through March 2023, and never left the board. This move makes perfect sense on the surface, but we should acknowledge that DG's issues were festering before Owens took the CEO role. DG's stock is likely to react positively given the respect for Vasos and recent poor performance. That said, we believe DG's value should be permanently impaired by structurally lower margins, increased competition, and slower store growth. (Ed Kelly)