<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>a5160614ex99-1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
                                                                    Exhibit 99.1

         Dollar General Reports First Quarter 2006 Earnings;
                         Comments on Outlook;
        Announces Preliminary Results of 2006 Shareholder Vote;
           Announces Analyst and Investor Conference Webcast

    GOODLETTSVILLE, Tenn.--(BUSINESS WIRE)--June 1, 2006--Dollar
General Corporation (NYSE: DG) today reported sales and earnings for
the first quarter ended May 5, 2006. Net sales were $2.15 billion, an
8.8 percent increase over net sales of $1.98 billion for the first
quarter of fiscal 2005. The increase in sales primarily reflects the
opening of 527 net new stores since the end of the prior year first
quarter. Same-store sales increased 1.6 percent in the fiscal 2006
first quarter compared to an increase of 5.0 percent in the fiscal
2005 first quarter. Net income for the quarter was $47.7 million, or
$0.15 per share, compared to net income of $64.9 million, or $0.20 per
share, in the first quarter of fiscal 2005.
    The Company's gross profit rate to sales declined by 132 basis
points in the 2006 period as compared with the 2005 period due to a
number of factors, including an increase in markdowns; a decrease in
the markups on purchases during the period, primarily attributable to
the continued shift to highly consumable products, which generally
have lower average markups; lower sales (as a percentage of total
sales) in the Company's home products and basic clothing categories,
which generally have higher average markups; an increase in the
Company's shrink rate; and higher transportation expenses primarily
attributable to increased fuel costs. These factors were partially
offset by higher average markups on the Company's beginning inventory
in the 2006 period as compared with the 2005 period.
    Selling, general and administrative ("SG&A") expense increased to
23.4 percent of sales for the first quarter of fiscal 2006 versus 23.1
percent of sales during the 2005 first quarter. The increase in SG&A
expense as a percentage of sales in the 2006 period as compared with
the 2005 period was due to a number of factors, including increases in
advertising costs due to the distribution of an advertising circular
in the current year period designed to increase brand awareness and
drive customer traffic; higher store occupancy costs, primarily due to
rising average monthly rentals associated with the Company's leased
store locations; increased store labor costs in support of the
advertising circular; and higher administrative labor costs, including
$1.0 million resulting from the Company's adoption of Statement of
Financial Accounting Standards ("SFAS") No. 123R, "Share-Based
Payment", in the 2006 period. These increases were partially offset by
$5.1 million of insurance recoveries relating to hurricane damages
incurred in fiscal 2005 and resulting losses due to business
interruption.
    Additionally, the Company incurred unexpected expenses of
approximately $2.4 million in the quarter related to a voluntary
product withdrawal as well as unanticipated losses related to several
store fires.

    Balance Sheet and Cash Flow

    Total merchandise inventories at the end of the 2006 fiscal first
quarter were $1.64 billion compared to $1.47 billion at the end of the
fiscal 2005 first quarter, an 11.6 percent increase in overall
inventories, and a 4.3 percent increase on a per-store basis.
Inventory turns on an annualized basis improved to 4.1 times in 2006
(53 weeks) from 4.0 times in the 2005 period (52 weeks). The Company
continues to adjust its inventory levels to ensure appropriate
in-stock levels in the stores and anticipates higher per-store
inventory levels for the remainder of the year. The Company continues
to identify, evaluate, merchandise and markdown older inventory.
    Cash capital expenditures in the quarter were $77.1 million. As of
May 5, 2006, the Company operated 8,078 neighborhood stores, including
49 Dollar General Markets. During the quarter, the Company opened 182
new stores and closed 33 stores.
    During the current year quarter, the Company repurchased
approximately 4.5 million shares of its common stock for $79.9
million, completing the existing 10 million share repurchase
authorization that had been scheduled to expire in September 2006.

    Outlook for Second Quarter and Fiscal Year 2006

    The Company expects diluted earnings per share ("EPS") of between
$1.09 and $1.16 for fiscal 2006, including a charge of approximately
$0.01 per share relating to the expensing of stock options. For the
second quarter ending August 4, 2006, the Company expects EPS to be
between $0.18 and $0.22. The full year and second quarter EPS
expectations do not include an estimate for any potential future
proceeds the Company may receive from the hurricane-related insurance
claim. The Company expects an effective income tax rate for the year
of approximately 37.3 percent.
    The Company anticipates second quarter sales, gross profit and
earnings to continue to be challenging. The Company believes that
certain economic factors, such as high gasoline prices and higher
interest rates and consumer debt levels continue to impact its
customers' spending, particularly on discretionary purchases, which
typically have higher gross profit. The Company is optimistic with
regard to its recent and anticipated merchandising and promotional
initiatives, but cautions that time is needed for these new
initiatives to have an impact on the Company's earnings.
    In 2006, the Company plans to spend approximately $375 million on
capital expenditures. The Company expects to open approximately 800
new traditional Dollar General stores and approximately 30 Dollar
General Markets by year-end. The Company is also testing a new store
layout, which it expects to implement in many of the traditional
stores remaining to be opened in fiscal 2006.
    The trial of the collective action against the Company in Federal
Court in Alabama (Edith Brown, on behalf of herself and others
similarly situated v. Dolgencorp, Inc., and Dollar General
Corporation) is scheduled to begin on July 31, 2006. The case is
discussed extensively in the Company's most recent Annual Report on
Form 10-K filed with the Securities and Exchange Commission for the
fiscal year ended February 3, 2006. Additional discussion of this case
will be included in the Company's Quarterly Report on Form 10-Q for
the quarter ended May 5, 2006. The Company believes that it should
prevail on the merits of the case at trial; however, no assurances can
be given that it will prevail. A negative outcome in the case could
have a material adverse impact on the Company's financial statements
as a whole.

    Preliminary Results of 2006 Shareholder Vote

    The Company also announced the preliminary results of the
shareholder votes at its Annual Meeting of Shareholders held on May
31, 2006. Shareholders elected each of the ten director nominees by a
vote of 92 percent or better, approved the amendments to the Dollar
General Corporation 1998 Stock Incentive Plan by a vote of 91.2
percent of votes cast and ratified the appointment of Ernst & Young
LLP as the Company's independent auditors for the year ending February
2, 2007 by a vote of 99.8 percent of votes cast. There were no
additional shareholder proposals presented at the meeting.
    Detailed final vote totals will be filed with the Company's
Quarterly Report on Form 10-Q for its second fiscal quarter ending
August 4, 2006.

    Quarterly Earnings Conference Call

    The Company will host a conference call today at 9:00 a.m.
CDT/10:00 a.m. EDT to discuss the quarter's financial results. If you
wish to participate, please call (334) 260-2280 at least 10 minutes
before the conference call is scheduled to begin. The pass code for
the conference call is "Dollar General". The call will also be
broadcast live online at www.dollargeneral.com and may be accessed by
clicking on the "Investing," then "Conference Calls and Investor
Events" links. A replay of the conference call will be available
through Thursday, June 15, online or by calling (334) 323-7226. The
pass code for the replay is 88796148.

    Analyst and Investor Conference Webcast

    On June 7, 2006, the Company will hold a meeting in Nashville,
Tennessee for analysts and investors. A webcast of this meeting
including accompanying slides can be accessed live beginning at
approximately 8:30 a.m. CDT (9:30 a.m. EDT) on the Company's Web site
at www.dollargeneral.com by clicking on the home page spotlight item.
The webcast will be available through June 21, 2006 on the Company's
Web site under "Investing," "Conference Calls and Investor Events."

    Non-GAAP Disclosures

    Return on invested capital ("ROIC"), included in the accompanying
schedules to this release, may be considered a non-GAAP financial
measure. Management believes that ROIC is useful because it provides
investors with additional useful information for evaluating the
efficiency of the Company's capital deployed in its operations. The
Company has provided a calculation of ROIC and a reconciliation to the
most comparable GAAP financial measure in the accompanying schedules.

    Forward-Looking Information

    This press release contains forward-looking information, such as
the information in the section entitled "Outlook for Second Quarter
and Fiscal Year 2006" and the information regarding the Company's
anticipated per-store inventory levels in 2006. The words "believe,"
"anticipate," "predict," "project," "plan," "expect," "estimate,"
"objective," "forecast," "guidance," "goal," "intend," "will likely
result," or "will continue" and similar expressions generally identify
forward-looking statements. The Company believes the assumptions
underlying these forward-looking statements are reasonable; however,
any of the assumptions could be inaccurate, and therefore, actual
results may differ materially from those projected in the
forward-looking statements. Factors and risks that may result in
actual results differing from such forward-looking information
include, but are not limited to:

    --  seasonality of the Company's business such as a sales
        shortfall during the fourth quarter;

    --  unanticipated markdowns due to inventory imbalances or other
        reasons;

    --  competition in the retail industry;

    --  a deterioration in general economic conditions that may impact
        consumer spending or the Company's costs of doing business,
        such as employment levels, personal debt levels, business
        conditions, high fuel and energy costs, inflation, tax rates
        and interest rates;

    --  the Company's ability to anticipate shifting consumer buying
        patterns and implement appropriate inventory strategies;

    --  changes in merchandise mix;

    --  customer response to the Company's merchandising, advertising
        and promotional efforts that is not in line with the Company's
        expectations;

    --  unusually adverse weather conditions, natural disasters,
        pandemic outbreaks, boycotts or similar disruptions;

    --  existing or future U.S. military efforts or a significant act
        of terrorism on U.S. soil or elsewhere;

    --  the Company's ability to obtain attractive pricing and other
        terms from its vendors;

    --  prolonged or repeated price increases of certain raw materials
        that could affect vendors' product costs and the Company's
        profitability;

    --  the Company's inability to pass on incremental pricing changes
        to its customers;

    --  costs and potential problems and interruptions associated with
        implementation of new or upgraded information systems and
        technology or with the maintenance or adequate support of
        existing systems, or the Company's inability to meet its
        informational technology staffing needs;

    --  labor shortages in the trucking industry;

    --  transportation and distribution delays or interruptions both
        domestically and internationally;

    --  excessive costs and delays associated with building, opening
        or achieving functionality of distribution centers;

    --  the loss of key members of the Company's senior management
        team or certain other key employees, or an inability to
        attract, retain and motivate qualified employees to keep pace
        with the Company's expansion schedule;

    --  the inability to effectively and efficiently operate its
        stores, including the inability to control losses resulting
        from inventory and cash shrinkage;

    --  the Company's ability to open new stores on schedule and to
        expand into additional market areas;

    --  the inability to execute operating initiatives;

    --  unanticipated changes in the federal or state minimum wage or
        living wage requirements or changes in other wage or workplace
        regulations, as well as the Company's ability to timely comply
        with those regulations;

    --  changes in federal, state or local regulations governing the
        sale of the Company's products, particularly
        "over-the-counter" medications or health products, as well as
        the Company's ability to timely comply with those regulations
        or to adequately execute a required recall;

    --  higher than expected increases in health, workers'
        compensation, general liability, property or other insurance
        costs or unexpected escalations in the Company's loss rates;

    --  results of legal proceedings and claims;

    --  the inability to obtain indemnification from foreign vendors;

    --  changes in interest rates; and

    --  the other risk factors described in the Company's Form 10-K
        and subsequent periodic filings with the Securities and
        Exchange Commission ("SEC"), as well as elsewhere in this
        press release.

    Readers are cautioned not to place undue reliance on
forward-looking statements made in this press release, since the
statements speak only as of the date of this release. The Company has
no obligation, and does not intend, to publicly update or revise any
of these forward-looking statements to reflect events or circumstances
occurring after the date of this release or to reflect the occurrence
of unanticipated events. Readers are advised, however, to consult any
further disclosures the Company may make on related subjects in its
documents filed with or furnished to the SEC or in its other public
disclosures.

    About Dollar General

    Dollar General is a Fortune 500(R) discount retailer, with 8,096
neighborhood stores as of May 26, 2006. Dollar General stores offer
convenience and value to customers by offering consumable basic items
that are frequently used and replenished, such as food, snacks, health
and beauty aids and cleaning supplies, as well as a selection of basic
apparel, house wares and seasonal items at everyday low prices. The
Company store support center is located in Goodlettsville, Tennessee.
Dollar General's Web site can be reached at www.dollargeneral.com.


              DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
                      Consolidated Balance Sheets
                        (Dollars in thousands)

                                      May 5,     April 29, February 3,
                                       2006        2005       2006
                                     ---------------------------------
                                    (Unaudited) (Unaudited)
ASSETS
Current assets:
  Cash and cash equivalents         $   71,876  $  236,523 $  200,609
  Short-term investments                18,825           -      8,850
  Merchandise inventories            1,636,118   1,465,981  1,474,414
  Deferred income taxes                  2,367      21,525     11,912
  Prepaid expenses and other current
   assets                               79,569      59,166     67,140
----------------------------------------------------------------------
  Total current assets               1,808,755   1,783,195  1,762,925
----------------------------------------------------------------------

Property and equipment, at cost      2,286,564   1,990,986  2,221,540
Less:  accumulated depreciation and
 amortization                        1,074,178     898,989  1,029,368
----------------------------------------------------------------------
Net property and equipment           1,212,386   1,091,997  1,192,172
----------------------------------------------------------------------
Other assets, net                       42,326      29,346     37,090
----------------------------------------------------------------------
Total assets                        $3,063,467  $2,904,538 $2,992,187
======================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term
   obligations                      $    8,800  $   10,737 $    8,785
  Accounts payable                     569,447     459,742    508,386
  Accrued expenses and other           379,218     322,742    372,920
  Income taxes payable                  22,027      54,557     43,706
----------------------------------------------------------------------
  Total current liabilities            979,492     847,778    933,797
----------------------------------------------------------------------

Long-term obligations                  333,471     256,452    269,962
Deferred income taxes                   63,690      72,342     67,633

Shareholders' equity:
  Preferred stock                            -           -          -
  Common stock                         155,859     164,071    157,840
  Additional paid-in capital           470,878     441,119    462,383
  Retained earnings                  1,060,427   1,129,626  1,106,165
  Accumulated other comprehensive
   loss                                   (740)       (928)      (794)
  Other shareholders' equity               390      (5,922)    (4,799)
----------------------------------------------------------------------
  Total shareholders' equity         1,686,814   1,727,966  1,720,795
----------------------------------------------------------------------
Total liabilities and shareholders'
 equity                             $3,063,467  $2,904,538 $2,992,187
======================================================================


             DOLLAR GENERAL CORPORATION AND SUBSIDIARIES

                  Consolidated Statements of Income

           (Dollars in thousands, except per share amounts)

                             (Unaudited)


                                  For the Quarter (13 Weeks) Ended
                             -----------------------------------------
                                May 5,   % of Net  April 29,  % of Net
                                 2006     Sales       2005     Sales
                             -------------------- --------------------
Net sales                    $ 2,151,387  100.00% $ 1,977,829  100.00%
Cost of goods sold             1,567,113   72.84    1,414,480   71.52
----------------------------------------------------------------------
Gross profit                     584,274   27.16      563,349   28.48
Selling, general and
 administrative                  502,989   23.38      456,428   23.08
----------------------------------------------------------------------
Operating profit                  81,285    3.78      106,921    5.41
Interest income                   (2,450)  (0.11)      (2,616)  (0.13)
Interest expense                   7,247    0.34        5,968    0.30
----------------------------------------------------------------------
Income before income taxes        76,488    3.56      103,569    5.24
Income taxes                      28,818    1.34       38,669    1.96
----------------------------------------------------------------------
Net income                   $    47,670    2.22% $    64,900    3.28%
======================================================================

Diluted earnings per share   $      0.15          $      0.20
=========================================         ============
Weighted average diluted
 shares (000s)                   315,233              331,218
=========================================         ============
Basic earnings per share     $      0.15          $      0.20
=========================================         ============
Weighted average basic shares
 (000s)                          313,997              328,208
=========================================         ============
Dividends per share          $      0.05          $      0.04
=========================================         ============


              DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
                 Consolidated Statements of Cash Flows
                        (Dollars in thousands)
                              (Unaudited)

                                      For the Quarter (13 Weeks) Ended
                                      --------------------------------
                                                   May 5,   April 29,
                                                    2006       2005
                                                 ---------- ----------
Cash flows from operating activities:
  Net income                                     $  47,670  $  64,900
  Adjustments to reconcile net income to net
   cash provided by (used in) operating activities:
      Depreciation and amortization                 48,778     44,006
      Deferred income taxes                          5,602      3,340
      Tax benefit from stock option exercises       (1,461)     2,967
      Change in operating assets and
       liabilities:
         Merchandise inventories                  (161,704)   (89,444)
         Prepaid expenses and other current
          assets                                   (12,429)    (5,464)
         Accounts payable                           69,467     60,526
         Accrued expenses and other                  6,118    (10,824)
         Income taxes                              (20,236)   (15,086)
         Other                                       2,079        199
----------------------------------------------------------------------
Net cash provided by (used in) operating
 activities                                        (16,116)    55,120
----------------------------------------------------------------------

Cash flows from investing activities:
  Purchases of property and equipment              (77,102)   (65,061)
  Purchases of short-term investments              (10,476)   (21,250)
  Sales of short-term investments                    6,000     64,175
  Purchases of long-term investments               (10,809)         -
  Proceeds from sale of property and equipment         303        122
----------------------------------------------------------------------
Net cash used in investing activities              (92,084)   (22,014)
----------------------------------------------------------------------

Cash flows from financing activities:
  Borrowings under revolving credit facilities     116,500          -
  Repayments of borrowings under revolving credit
   facilities                                      (51,500)         -
  Repayments of long-term obligations               (2,364)    (4,722)
  Payment of cash dividends                        (15,686)   (13,145)
  Proceeds from exercise of stock options           10,934     13,494
  Repurchases of common stock                      (79,947)   (25,062)
  Tax benefit from stock option exercises            1,461          -
  Other financing activities                            69         22
----------------------------------------------------------------------
Net cash used in financing activities              (20,533)   (29,413)
----------------------------------------------------------------------

Net increase (decrease) in cash and cash
 equivalents                                      (128,733)     3,693
Cash and cash equivalents, beginning of period     200,609    232,830
----------------------------------------------------------------------
Cash and cash equivalents, end of period         $  71,876  $ 236,523
======================================================================

Supplemental schedule of noncash investing and
 financing activities:
Purchases of property and equipment awaiting
 processing for payment, included in Accounts
 payable                                         $  16,344  $   2,810
Purchases of property and equipment under
 capital lease obligations                       $     877  $     578
======================================================================


              DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
                    Selected Additional Information
                              (Unaudited)

                                Sales by Category (in thousands)


                                         13 Weeks Ended
                          --------------------------------------------
                              May 5,        April 29,         %
                               2006           2005          Change
                          --------------- ------------- --------------
Highly consumable         $    1,455,984  $  1,321,306           10.2%
Seasonal                         309,583       275,295           12.5%
Home products                    211,665       211,752            0.0%
Basic clothing                   174,155       169,476            2.8%
                          --------------- ------------- --------------
   Total sales            $    2,151,387  $  1,977,829            8.8%
                          =============== ============= ==============



                                               New Store Activity


                                                 13 Weeks Ended
                                          ----------------------------
                                           May 5, 2006  April 29, 2005
                                          ------------- --------------

Beginning store count                         7,929         7,320
New store openings                             182           255
Store closings                                 33            24
Net new stores                                 149           231
Ending store count                            8,078         7,551
Total selling square footage (000's)         55,937        51,739


             DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
                         Non-GAAP Disclosures
                    Return on Invested Capital (a)
                             (Unaudited)

                                          For the four quarters ended
                                          ----------------------------
                                              May 5,       April 29,
($ in thousands)                               2006          2005
                                          -------------- -------------

 Net income                               $      332,925 $    341,241
 Add:
     Interest expense, net                        18,670       19,129
     Rent expense                                304,319      264,423
     Tax effect of interest and rent            (115,224)    (101,063)
                                          -------------- -------------
     Interest and rent, net of tax               207,765      182,489
                                          -------------- -------------

 Return, net of tax                       $      540,690 $    523,730
                                          -------------- -------------


 Average invested capital:
     Average long-term obligations (b)    $      301,303 $    285,575
     Shareholders' equity (c)                  1,679,536    1,589,803
     Average rent x 8 (d)                      2,274,968    1,964,272
                                          -------------- -------------
     Invested capital                     $    4,255,807 $  3,839,650
                                          -------------- -------------


 Return on invested capital                         12.7%        13.6%
                                          ============== =============


(a) The Company believes that the most directly comparable ratio
    calculated solely using GAAP measures is the ratio of net income
    to the sum of average long-term obligations, including current
    portion, and average shareholders' equity. This ratio was 16.8%
    and 18.2% for the rolling four quarters ended May 5, 2006 and
    April 29, 2005, respectively.
(b) Average long-term obligations is equal to the average long-term
    obligations, including current portion, measured at the end of
    each of the last five fiscal quarters.
(c) Average shareholders' equity is equal to the average shareholders'
    equity measured at the end of each of the last five fiscal
    quarters.
(d) Average rent expense is computed using a rolling two-year period.
    Average rent expense is multiplied by a factor of eight to
    capitalize operating leases in the determination of pretax
    invested capital. This is a conventional methodology utilized by
    credit rating agencies and investment bankers.

    CONTACT: Dollar General Corporation
             Investor Contact:
             Emma Jo Kauffman, 615-855-5525
             Media Contact:
             Tawn Earnest, 615-855-5209
</TEXT>
</DOCUMENT>
