There's a thread on the BRK board going, started by rivervalley, on this one but I thought it could use a thread here.

As I type, the stock is now at around $153, roughly 41% down since its Oct. 2022 highs and about 24% down since the end of May. Last 4 quarters earnings are at $10.61. Current P/E is sub 15 (well below trend), with competitors such as DollarTree currently at 21.

I've been buying heavily since about $160. My thesis is simple -- DG is still growing at a remarkable clip (it's still the fastest growing retailer by store count, and has historically had gaudy ROE numbers), it makes piles of money, and is about as safely situated in the retail space as the bigger outlets such as Walmart for a host of reasons. Looks of some of its stores aside, I view it as the best in show business-wise of the dollar stores. I think (1) the hits on earnings growth are transient, and (2) if I'm wrong, the downside risk has been mostly eliminated due to the $100+ drop in share price since October.

That said, there's a lot in the recent earnings report to digest, including some real challenges/headwinds. Same store revenue growth was ~halved, expected sales growth was marked down to 3.5% and 5% (from 5.5% - 6%), EPS projections for the year are flat to -8%, debt service costs have increased, its higher margin discretionary item sales are dropping, the growth in DG stores, including its 'higher end' Popshelf stores, is being pulled back for these and like reasons, shrinkage/theft is up, competition in the space is increasing, etc.

I'm of the opinion that most of the negative is ephemeral or of the kind that DG has a long track record of addressing, and 5-10 years out DG will have a much larger footprint than it does today.