Well, good morning, and welcome to Dollar General Corporation's 2023 Annual Meeting of Shareholders. My name is Jeff Owen, and I'm the CEO of Dollar General, and the board of directors has appointed me to serve as the chairman of this meeting, which I now call to order. Let's begin with introductions. The following board members are in attendance at today's meeting: Mike Calbert, our Chairman of the Board, Warren Bryant, Ana Chadwick, Pat Fili-Krushel, Tim McGuire, Debra Sandler, Ralph Santana, and Todd Vasos.
Our executive officers are also in attendance, including John Garratt, President, Kelly Dilts, Executive Vice President and Chief Financial Officer, Steve Deckard, Executive Vice President of Growth and Emerging Markets, Kathy Reardon, Executive Vice President and Chief People Officer, Steve Sunderland, Executive Vice President of Store Operations, Emily Taylor, Executive Vice President and Chief Merchandising Officer, Rhonda Taylor, Executive Vice President and General Counsel, Carman Wenkoff, Executive Vice President and Chief Information Officer, and Anita Elliott, Senior Vice President and Chief Accounting Officer. I'd like to thank our board of directors and our executive officers for their continued dedication, teamwork, and leadership at Dollar General. I want to especially thank Todd Vasos, who retired as CEO in November, and John Garratt, who will be retiring at the end of this week.
Todd is an important mentor to me. I appreciate him continuing to serve with us as a consultant and as a member of our board. John has been a wonderful business partner and a leader in this organization, and we wish him well and all the best in his retirement. Finally, Josh Trusley is in attendance today on behalf of Ernst & Young, our independent registered public accounting firm, and Ken Frank is attending on behalf of Broadridge, our Inspector of Election. I'll now turn the meeting over to Christine Connolly, our corporate secretary, to review the meeting announcements. Christine?
Good mo rning. We're holding today's meeting pursuant to the notice provided to shareholders beginning on April 11, 2023. Please note that this meeting is being recorded. Shareholders of record at the close of business on March 22, 2023, or their duly appointed proxy holders, may vote on the items of business at this meeting. For your convenience, additional copies of the meeting agenda and rules of conduct, along with the 2022 annual report and the 2023 proxy materials, are available in the back of the room, as well as on proxyvote.com, once past the login screen. In addition, a copy of the shareholders list as of the record date is available for inspection by confirmed shareholders of record or by their confirmed agents or attorneys. Our board has appointed Broadridge to serve as the Inspector of Election.
Broadridge has informed us that there are present today, in person or by proxy, the holders of not less than a majority of the shares issued and outstanding on the record date. Having a quorum, the polls are now open. If you've previously voted, you don't need to vote again. If you've not already voted, or you want to change or revoke your vote, please see Mr. Frank before the polls close at the end of discussion of today's last voting item to obtain a ballot. We'll begin the meeting with a presentation of the voting items, followed by up to 15 minutes to address any written questions about the proposals that were submitted before or during the meeting in accordance with the rules of conduct. Mr. Owen will present the management proposals. Each shareholder proponent or their designated representative will have three minutes to present each shareholder proposal.
The polls will then close, and we'll adjourn the formal business of the meeting, followed by a brief business update. After the business update, we'll take up to 15 minutes to answer general questions that were submitted before or during the meeting in accordance with the rules of conduct. Only confirmed shareholders of record or their duly appointed proxy holders may submit questions at this meeting. Each such shareholder may submit up to 2 questions per voting item and up to 2 questions during the general Q&A session. Please submit pertinent questions, whether regarding voting items or for the general Q&A session, before the polls close, to Kevin Walker, our Vice President of Investor Relations. I'll now turn the meeting back over to Mr. Owen to introduce the items of business.
Thank you, Christine. There are 4 management proposals and 3 shareholder proposals being voted on today, as described in the meeting notice and in the proxy materials. The first item is the election of the 9 directors listed in the proxy statement to hold office until the next annual meeting and until their successors are duly elected and qualified. Our board recommends that you vote for these directors. The second item of business is the advisory vote to approve the resolution regarding the compensation of Dollar General's named executive officers, as disclosed in the proxy statement. Our board recommends that you vote for this proposal. The third item of business is the advisory vote to recommend the frequency of future advisory votes on the compensation of Dollar General's named executive officers. Our board recommends that you vote for a frequency of 1 year.
The fourth item of business is the ratification of the appointment of Ernst & Young LLP, as our independent registered public accounting firm for fiscal 2023. Our board recommends that you vote for this proposal. The fifth item of business is a shareholder proposal regarding cage-free eggs progress disclosure. This proposal is being presented by a representative of The Humane Society of the United States. Would the proponent please stand, and we will bring you a microphone to present this proposal?
Thank you. Good morning, everyone. My name is Kate Brindle. I'm with The Humane Society of the United States, and I'm here representing this proposal. I'll keep it very brief this morning. We believe the proposal speaks for itself, and if anyone would like additional information, we would refer you to the proxy materials. Thank you very much.
Thank you. Our board recommends that shareholders vote against this proposal, which is item 5 on the ballot. The sixth item of business is a shareholder proposal to take steps to amend Dollar General's governing documents to remove the 1-year holding requirement to call a special meeting of shareholders. This proposal is being presented by Mr. John Chevedden or his representative. Would the propon ent please stand, and we will bring you a microphone to present the proposal?
Good morning, everyone. My name is Sheila Ewing Agni with Music City Mobile Notary. I am reading this special proposal on behalf of Mr. John Chevedden. Stakeholders ask our board to take the steps necessary to amend the company governing documents to give the owners of a combined 25% of the outstanding common stock, the power to call a special shareholder meeting, regardless of length of stock ownership to the fullest extent possible. Some companies, like Dollar General, prohibit shareholders from participating in calling for a special shareholder meeting if they own stock for less than one continuous year. Requiring one continuous year of stock ownership can serve as a bitter poison pill.
No company has ever cited in its annual meeting proxy, a single example of shareholders at any company, anywhere, ever successfully calling for a special shareholder meeting at a company that excludes all shares not held for one continuous full year. It is also important to vote for the shareholder right to call a special shareholder meeting proposal, because Dollar General shareholders have no right to act by written consent. Shareholders at many companies have a right to call a special shareholder meeting and the right to act by written consent. Calling a special shareholder meeting is hardly ever used by shareholders, but the main point of calling a special shareholder meeting is that it gives shareholders at least significant standing to engage effectively with management.
Management will have an incentive to genuinely engage with shareholders instead of stonewalling, if shareholders have a reasonable plan B alternative of calling a special shareholder meeting. In most cases, these means are as effective as mailing a postcard to the CEO. A reasonable right to call a special shareholder meeting is an important step for effective shareholder engagement with management. The mere fact of an improved shareholder right to call a special meeting, which can be called to elect a new director, could be an incentive for Mr. Michael Calbert, Dollar General Chairman, to improve his performance. Mr. Calbert received the most against votes of any Dollar General director in 2022, 29 million votes against. Mr. Calbert's against votes were three times the average number of against votes of the other Dollar General directors.
Please vote yes for special shareholder meeting improvement, proposal six.
Thank you. Our board recommends that shareholders vote against this proposal, which is item six on the ballot. The seventh item of business is a shareholder proposal requesting a worker safety and well-being audit and report. This proposal is being presented by a representative of Domini, excuse me, Domini US Impact Equity Fund, the lead filer of the proposal. Would the proponent please stand, and we will bring your microphone to present this proposal.
Thank you for the opportunity to join you today. My name is David Williams. I'm a stock at Dollar General, and I'm one of the hundreds of thousands of Dollar General employees who come into work every day scared for our safety. We're scared because we know that the leaders of Dollar General are not looking out for the safety of workers. The company has expanded so fast and so recklessly, that on any given day, I might have to deal with a rat infestation, a door that won't lock, or someone pointing a gun at me with no security to protect me. We urge Dollar General to commit to an independent audit and meet directly with workers to hear our demands and to take steps to make their stores a safe place to go to work.
I'm here today on behalf of shareholders, Domini Impact Investments, and five co-filers who filed this proposal. for an independent third-party audit on how the company's policies and practices impact the health and safety of workers. Even if you don't personally have to worry about the hazards my coworkers and I deal with, if you have financial stake in Dollar General, this should concern you. Just last week, the US Department of Labor announced $3.4 million in new penalties after nine inspections across four states. This makes it a total of $21.7 million in fines since 2017. In October, OSHA added Dollar General to its Severe Violator List, dedicated to employers who have willful, repeated safety violations.
These violators include aisles, emergency exits, fire extinguishers, and electrical panels blocked by boxes of merchandise stacked up to 6 feet high. This could lead to fires where workers and customers aren't able to get out of the store, or boxes falling on workers or customers when they navigate the aisles, trying to squeeze around them. This is all made worse by the serious level of understaffing. It is not uncommon for a worker to be alone in the store at night, in areas where robberies commonly occur. As a result, at least 49 people have been killed and 172 injured in Dollar General from gun violence since 2014.
Mr. Williams, just a reminder, you have three minutes. I think you're at three minutes, so if you start wrapping up.
Oh, yeah, sure. Absolutely. Thank you for listening, and I appreciate all y'all support.
Thank you.
Thank you. Our board recommends that shareholders vote against this proposal, which is item 7 on the ballot. No other business was submitted pursuant to our bylaws for consideration at this meeting. Before we address any questions about these voting items, let me remind shareholders of record and their duly appointed proxy holders that this is the final opportunity to submit or change your vote, as the polls will close immediately following this discussion. This is also the final opportunity to submit questions about the voting items or for the general Q&A session that will follow my business report. Christine Connolly, have any questions been submitted?
No, no questions have been submitted pertaining to the voting items.
Since no questions have been submitted relating to the voting items, We will continue to the preliminary voting results. The polls are now closed. Following the announcement of the preliminary voting results, the business of the meeting is adjourned. Christine, will you please announce the preliminary voting results?
Based on the preliminary report of the Inspector of Election, each of the nine nominees standing for election has received a majority of the votes cast in favor of his or her election. The compensation of Dollar General's named executive officers has been approved on an advisory basis. Shareholders have recommended one year for the frequency of future advisory votes on Dollar General's named executive officer compensation. The appointment of Ernst & Young as the company's independent registered public accounting firm for fiscal 2023 has been ratified. The shareholder proposal, listed as item five on the ballot, has not been approved. The shareholder proposal, listed as item six on the ballot, has not been approved. The shareholder proposal, listed as item seven on the ballot, has been approved.
The final certified voting results, as well as the board's decision as to how frequently shareholder votes will be conducted on the compensation of our named executive officers in light of the shareholder recommendation, will be reported on a Form 8-K. Before we turn to the business report, we would like to caution you that today's comments may contain forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act. Forward-looking statements can be identified because they are not limited to historical matters and regard our strategy, plans, intentions, expectations, or beliefs about future occurrences or results, including but not limited to, statements regarding our future potential, key operating priorities and initiatives, opportunities, strategies, and business, as well as planned investments.
Actual results might differ materially from those projected in the forward-looking statements as a result of a variety of important factors, including, but not limited to, those described in the Risk Factors section of our Form 10-K, filed with the SEC on March 24, 2023, and other factors that may be discussed today. We caution against undue reliance on these forward-looking statements, which speak only as of today's date. The company disclaims any obligation to publicly update or revise these statements, except as may be required by law.
Thank you, Christine, and thank you all for being here today. This is my first opportunity to speak to you as CEO, and it is an honor to address you today at our 2023 annual meeting of shareholders. While this is my first year in this role, I have had the pleasure of serving this organization for 30 years, and I want to assure you that our long-standing mission of serving others is unchanged and remains at the center of everything that we do. Dollar General is an essential part of the communities we call home around the country, often serving places that other retailers cannot or will not. In fact, more than 80% of our stores serve towns of 20,000 or fewer people.
With more than 19,000 stores, we operate more stores than any other retailer in the United States.... providing us the opportunity to make significant impact in rural communities that seek affordable solutions to their needs. Looking back at 2022, we faced a number of challenges, including supply chain constraints, inflationary pressures, and a core customer under financial pressure. While these challenges impacted our financial results, our team was resilient and responded with great purpose to find solutions for our customers while continuing to deliver healthy returns for our shareholders. As a result, we made significant progress advancing many of our key initiatives, which continued to differentiate and distance us from the rest of the discount retail landscape.
During fiscal 2022, we completed more than 2,900 real estate projects, including the opening of our 19,000th store, and nearly tripling the number of pOpshelf store locations. In addition, we opened 3 new distribution facilities in Nebraska, Texas, and Georgia to support our ongoing growth. Most recently, we opened our first store in Mexico, as we seek to continue extending our value and convenience proposition to new customers and communities. As the largest retailer in the United States by store count, and with a number of strategic growth initiatives in progress, we are uniquely positioned to be a force for opportunity for our customers, employees, and communities every day. We have a clear vision for the future of Dollar General and how we will move this company forward through a strong combination of execution and innovation.
Our execution continues to be driven by our four key operating priorities. Our first operating priority is driving profitable sales growth. We have a robust portfolio of sales-driving and margin-enhancing initiatives, which are providing our customers with even more value and convenience, while driving strong results and strengthening the foundation for future growth. In 2022, we completed the rollout of our non-consumables initiative in the vast majority of our stores, and nearly tripled our number of pOpshelf stores as well. Both of these efforts provided enhanced treasure hunt opportunities for our customers at tremendous values and a fun shopping experience. DG Fresh, which facilitates self-distribution of frozen and refrigerated goods in our stores, continues to contribute significant cost savings and higher sales, most notably in our perishables department. This initiative also enables the continued expansion of our offering of our core customers and their families.
I also want to mention DG Wellbeing, our initiative focused on increasing access to affordable healthcare products and, over time, services, particularly in rural America. We increased the footprint of this expanded assortment to a total of nearly 4,400 stores in 2022, and we expect to continue this rollout in the year ahead. Looking ahead, we expect to expand upon these initiatives and other opportunities in 2023, including further cooler door expansion, private brand enhancements, distribution and transportation efficiencies, and global sourcing efforts. Our second operating priority is capturing growth opportunities. Our proven high return, low risk real estate model has served us well for many years, and coupled with our ongoing format innovation, continues to be a core strength of our business.
Our larger format stores are providing more products for our customers while also driving greater sales productivity, and we are excited about the important role of these formats in our future growth. Our digital initiative, including our growing DG Media Network and our third-party partnership to offer same-day delivery in nearly 14,000 stores, complements our unique and expansive brick-and-mortar footprint. We continue to focus on opportunities to deploy and leverage technology, to provide our customers with an even more convenient, frictionless, and personalized shopping experience. Our third operating priority is enhancing our position as a low-cost operator. We aim to keep our business simple while controlling costs and driving efficiencies throughout the organization.
During 2022, we expanded self-checkout to a total of more than 11,000 stores as part of our Fast Track initiative, which continues to focus on enhancing convenience for customers while driving efficiencies for our teams. We also significantly expanded our private tractor fleet, which is now one of the largest in the U.S., to a total of more than 1,600 tractors. These efforts continue to provide greater operational control within our supply chain, while further optimizing our cost to serve. Our fourth operating priority is investing in our diverse teams through development, empowerment, and inclusion. We continue to focus on attracting, developing, and retaining talented employees. Over the last 80-plus years, we have helped millions of individuals start, and progress in their careers, providing opportunities to gain new skills and develop talents, supported by our award-winning training and development programs.
Importantly, we continue to prioritize direct engagement with our teams to learn how we can continue to enhance our position as an employer of choice. Ultimately, we believe that the opportunity to build a long-term career with a growing retailer is our most important currency to attract and retain talent. Let me share with you some of the financial highlights of fiscal 2022, including net sales of $37.8 billion, a same-store sales increase of 4.3% compared to fiscal 2021, operating profit of $3.3 billion, net income of $2.4 billion, and diluted earnings per share of $10.68. We delivered cash flow from operations of $2 billion. We also invested $1.6 billion in capital expenditures to grow and improve our operations.
In fiscal 2022, we opened 1,039 new stores. We also remodeled 1,795 stores, relocated 127 stores, for a total of 2,961 real estate projects. We were operating a total of 31 distribution facilities at the end of fiscal 2022 to support our ongoing growth. Moving forward, we continue to expect the majority of our new stores to be in one of our larger square foot formats, as we continue to look for ways to not only expand the number of communities we serve, but also the ways in which we are able to serve them. We have an incredible footprint of stores to serve communities around America, and we are excited about the growth opportunities ahead for us in 2023 and beyond.
Dollar General is powered by our people, who I believe make up the best team in retail. We are committed to investing in our people and creating opportunities for their growth and development while fostering an inclusive and enriching culture. We continue to make significant investments to enhance the employee experience across the organization. We created more than 10,000 new jobs in 2022. At the end of the year, more than 170,000 talented and dedicated Dollar General employees were serving customers in their communities across the United States. Also, in 2022, we invested more than 4 million training hours in our employees to promote their education and development. Within our retail operations, more than 70% of store employees at or above the lead sales associate position were internally placed.
I am continually inspired by this team's sense of purpose, and I am grateful for their dedication to serving our customers and communities. Dollar General's culture remains firmly rooted in our mission of serving others, which has been at the core of who we are for nearly 85 years. We have a deep connection to the communities we call home, and we continue to be intentional about investing in these communities to nourish the mind, body, and planet. During 2022, Dollar General and our foundations donated nearly $23 million to charitable causes, with a primary focus on uplifting and empowering individuals of all ages through literacy and basic education. Since its inception in 1993, the Dollar General Literacy Foundation has awarded more than $219 million in grants to nonprofit organizations, and more than 16 million individuals have received assistance.
I encourage everyone to take a look at our most recent Serving Others report, available on our website, if you would like more detail on how we are prioritizing serving our employees, customers, and communities. We are excited about these efforts and are proud to partner with so many fantastic organizations and foundations to extend hope and opportunity to individuals throughout these communities. In closing, I want to reiterate how proud I am of the team at Dollar General. We are committed to being here for what matters for our customers, our employees, our communities, and our shareholders. We are here to bring the products, growth, and opportunities people need, and we're committed to bringing them to the places where they matter most.
I am very excited about the future of this business, and we are confident that our unique business model, strategic vision, and strong track record of innovation and execution will allow us to continue to deliver everyday value and convenience to our customers and create long-term value for our shareholders. I'm honored to be a part of the Dollar General family and I am looking forward to all that lies ahead as we move forward together. I want to thank you for your interest and investment in Dollar General, and we appreciate your continued support. At this time, we will answer any pertinent questions that were submitted before or during the meeting, prior to the closing of the polls, in compliance with the rules of conduct for the meeting. Christine, have any questions been submitted?
Yes, we have several questions. We have a couple of questions regarding expansion of the company's restricted substance list. First, do you intend to expand your restricted substance list beyond your private brand items to national brands?
Dollar General is committed to selling safe, effective, and affordable products that meet or exceed our company's quality and performance standards, as well as legal and regulatory requirements. Currently, our restricted substances list applies only to certain private label formulated items. However, we continuously work to identify areas where we can enhance and expand these efforts, both as to our private label and national brand products.
Okay, next, will the restricted substance list be expanded to include all phthalates or, in the interim, ortho-phthalates and PFAS? Will the company promote the use of third-party certified products such as the EPA's Safer Choice offerings?
As I previously mentioned, compliance with federal, state, and local law forms the baseline expectation for all of our products. Currently, the company's restricted substances list applies to 19 intentionally added chemicals in our formulated private label items, and does not specifically ban all phthalates or PFAS, except as required by law, and does not specifically take into account programs such as the EPA's Safer Choice program. We work continuously to identify areas where we can enhance and expand these efforts, as we did in 2022, with the expansion of our RSL from 8 to 19 chemicals.
The next question is, will you be a responder to the Chemical Footprint Project and take part in the survey?
We became a signatory to the Chemical Footprint Project in 2022.
Okay. The next question is, will you work with your suppliers to procure bisphenol-free receipts, and in the interim, educate workers on the harms of bisphenol A and bisphenol S, and limit worker and consumer exposure to these chemicals?
Employee safety is of paramount importance to us, and our safety programs and related training are based on federal, state, and local requirements. We continuously look for ways to enhance these programs, including going beyond what is required by law. We also provide customers with the ability to forgo a paper receipt and instead receive a digital receipt.
The next question is, we have a couple of questions related to the protection of pollinators, such as bees, and Dollar General's participation in the Bee-Friendly Retailer Scorecard.
As outlined in our Serving Others report, we continuously work to identify areas where we can make a positive impact on the world around us, while keeping our customers' product and affordability needs top of mind. To that end, we have adopted policies such as our chemical policy and restricted substances list, that go beyond what is required by law. We will continue to look for additional areas in which we, working with our vendors, can expand these efforts.
Okay. At last year's annual shareholder meeting, in response to a question about progress investigating a possible partnership with local farmers in Albuquerque to stock sustainable, locally grown produce and food products in Dollar General stores, the company committed to continued dialogue on this matter. As the new CEO, will you continue this dialogue?
We've appreciated our conversations with Agri-Cultura, the Agri-Cultura Network, regarding potential local sourcing of products in Albuquerque area. In selecting vendors, we are keenly focused on providing our customers with the products they need and the products they want at prices that they can afford. To the extent we are able to do so efficiently and cost-effectively by sourcing locally, we will.
Okay, the next question is: Is there a discussion internally about profit and community engagement with local, healthy, fresh produce providers that would inevitably increase the demographic of people that shop at your stores and also increase profits?
We carried fresh produce in more than 3,200 stores at the end of 2022, with a goal to do so in over 10,000 stores within the next few years. Our fresh distribution network is key to our ability to do this, and we will consider local sourcing where we can to do so, if we can do it efficiently and cost effectively.
The next question: Are safety violations and out-of-stocks caused by lack of money to stores for hiring more staff? Is Dollar General prepared to remedy this, and how quickly?
Dollar General is committed to providing a safe work environment for its employees and safe shopping experience for its customers. We employ policies, procedures, and training programs designed to ensure that our store managers and their teams understand the necessary steps to create and maintain a safe work and shopping environment. If we fail to live up to these standards, we take that seriously, and we work to remedy the situation. We work to retrain and take additional steps to try to prevent a reoccurrence. As it pertains to the OSHA violations, we have taken action to address the situations referenced in those citations, as well as to correct the root causes of those issues, and we are working with OSHA to resolve these matters.
The next question is: will you consider not funding Republican candidates?
Dollar General does not have a company-sponsored political action committee, and does not directly make contributions to participate or intervene in any campaign on behalf of any candidate for public office, or to influence the general public with respect to the candidate for a specific election. If you'd like more information, the company's political contributions policy and our inaug ural political contributions report are available for further review in our Serving Others report.
Okay, we have one last question: I had problems with my local store. The price on shelf often did not match the price charged at checkout. What steps have been taken or will be taken to prevent this?
We strive to provide our customers with convenient shopping experience, which includes providing them with the shelf pricing they can count on every day. In those situations where we fail to live up to this expectation, we take swift action to identify the root cause of the issue and correct it. Sometimes those root causes relate to systems, and sometimes they relate to store-level execution. Regardless, we take action designed to ensure we prevent their reoccurrence.
No further questions.
Since there are no further questions, we will conclude the meeting. Thank you for your attendance today. Again, thank you for your investment in Dollar General.