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Stocks M / Middleton Doll


Subject:  Doll Date:  2/3/2005  2:38 PM
Author:  rgrossfool Number:  2 of 5

Newborn Nursery® Adoption Centers

Could this be a possible success that Middleton Doll and their investors have been looking for? With their sales continually trailing off in the last few years and the consumer goods section showing on and off losses lately DOLL has been looking hard for a catalyst. Could this be the innovation that they need to get their sales and profits fired up.

If you read the paragraph at the bottom of the page, it lists 8 of the currently running Adoption Centers. The company says the stores have been very successful and they now plan for Saks to expand it to 100 stores in the next 3 years. I am very curious of just how successful the stores are. Is there anyone who lives near these areas that could check them out?

The quarterly report last November stated the following "...$0.26 million of start-up sales for Newborn Nursery dolls and accessories for Saks Department Stores" I assume this was for eight stores considering that is what they had at the time. If you conservatively assume that this was for a whole quarter then 100 stores would increase sales by $3.35 million. This would represent a 40% increase to sales in 3 years, and using current gross margins and equal operating cost, a 550% increase in operating profits to $1.829 Million. ***Based on last quarterly report. On top of that management lately has been increasing gross margins, and lowering operating costs especially administration costs. If this plan is successful I do not see why it could not be fairly valued at $30 a share with $1.96 a s