Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: mikebboylan One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 401  
Subject: Cash flow vs new store cost Date: 10/10/1999 1:31 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
From the DAB 10Qs, it looks like a new store costs about $12m and pays out from its cash flow in four to five years. That means that for every five stores they have, they can build one more store per year from cash flow without new borrowings. They have about twenty stores, so they can build four stores a year without going to the well. Or, they can build two or three and reduce borrowings, buy back stock or what have you. A blip of two percent doesn't effect these fundamental growth numbers, unless it deepens in successive quarters. What could cause SSS to sequentially decline? Poor food, poor maintenance on games, failure to replace unpopular games, poor choice of location for new stores, in other words, taking their eye off the ball. We can all watch the signs in our respective parts of the country and report on this board. I don't see any signs of slipping management at the Houston store. Absent deteriorating store management, bad luck on new store locations (which can be cured by closure and a non-recurring writeoff), or a declining population of yuppies, I see no reason why DAB shouldn't grow EPS at 20% per year until they run out of cities over 500K population worldwide.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Macro Economics

Implications of the Ballad of Ted Plotz
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement