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Really informative powerpoint went with this one. I hope they make them available outside just the webcast.

Presentation was made jointly by the CMO, Jim Taschetta and the COO/CFO, Myles McCormick.

Jim covered most of the bases we're familiar with, including customer loyalty, and repeat business.

Here are a few facts from his section (some we saw before in the ICR Xchange Conf presentation, some were new):

1. Expanding foundation
Mineral awareness: 26% unaware; 74% aware of mineral makeup
77% of those aware have not tried; 23% have tried;
60% indicate they are somewhare or extremely likely to try in next 12 months; BareMinerals is the brand non-users are most likely to try

2. Expand base of foundation; BARE has 12% share of facial makeup market ($3.6B market); then listed plans

3. Strengthen Color
BARE has 2% share of color market ($4.9B market)

4. Establish Skin Care (they just started this effort early this year)
BARE has 1% share of skin care market ($7.8B market)

note: Brand Permission: Foundation Users willing to try Skin Care of Same Brand for BARE is 78%; for other brands is 46% ! (this goes along with them being a natural makeup)

Myles McCormick's highlights

He discussed how they were reaching all segments of the market (young - old, broke to rich etc) by the strategy of selling through Sephora, Ulta, Nordstrom, QVC, Infomercials, Retail Boutiques

Some interesting numbers/facts/strategy

1. Domestic Distribution growth
This slide has a list of domestic door count year end
2007 they had - total of 559; 248 Ulta; 185 Sephora; (the rest split)
Forecast for 2008 - total of 786; 308 ulta, 225 Sephora, small pieces for Boutiques, Dept Stores, SiJCP
Full Potential - total of 2300+; 200+ Dept Stores; 1000 Ulta; 400 Sephora; 400 Boutiques; 300+ SiJCP

2. Retail revenue indexed to 1st door
This slide showed how each door expanded revenue; there is some cannibalisation, but still an increase
1 location = 1x
2 locations = 1.3x
3 locations 2.1x
4 locations 2.3x

3. Global Expansion Opportunity - Intl market for cosmetics is 4.5x size of US - approx $36B
Near term addressable markets - US, Japan, UK, France, Germany, Spain, Italy, Korea, 2.5x size of US - approx $20.5B

4. Global Expansion Update
France - presence in all Sephora France doors; #1 foundation market share; #1 US color brand
German - launced on QVC in July 2007; #1 color brand
UK - strong launch at Selfridge's in London
Japan - #1 beauty brand on QVC Japan
New Markets - Launching Spain and Canada in Q4

5. Superior Operating Model - I LOVE THIS SLIDE!!
This is a simple slide with 4 competitors: BARE, L'Oreal, Estee Lauder, Avon, comparing Gross Margin, Expenses, Advertising & Promo, and Operating Margin.
If you just looked at Operating Margin you would swoon - BARE is beating the closest by double. Avon is at 8.8%; EL at 10.3%; L'Oreal at 16.6%; and BARE is at 33.1%. Nice.

6. Financial Summary
recap of Q1; reiteration of FY2008 guidance; long term sales growth of 20-25%; long term EPS growth of 25%
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couple of questions:

1. Why is the P/B negative?
2. Why recent P/S so high? Is it a jump in margins?
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No. of Recommendations: 1
1. Why is the P/B negative?
2. Why recent P/S so high? Is it a jump in margins?

Hi anuragupta! Sorry I've been swamped.

These aren't the type numbers that value investors would salivate over, that's true.

P/B is N/A because B is negative (same is reported by Y!finance and reueters). Debt here is 251M, while cash is 37M (and revenue is 535M).

P/S is high because it's a high growth company that's just two years old.

I think the trends are important though:
a) debt is getting paid off regularly. BARE has substantially higher operating margins than their competitors, so can pay this out of cash flow. (the big worry with debt is that dilution will occur through new offerings of stock to pay the debt)

b) P/S is ever decreasing - and not just because the stock price has been going down lately. The "S" is the revenue per share over the last year. BARE's revenue has gone up every quarter.

BTW, for anyone looking at ratios/numbers, Reuters site is great and a little more in depth than Y!F:

And for trends I like to look at interactive charts - since you can look at P/E over time (but they don't have P/S over time, you just have to figure that yourself).

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