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.
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