Laserfiche WebLink
Donaldsony Lnilkln & yens <br />tte <br />tier, and Into the Middle Atlantic. Although war <br />Increasing, It's Important to note that warehouses <br />competition is rapidly <br />or 1 i-12"/0, of the 324 U.S. Ses are present in only about 35_a�� <br />1Q-15 appear to be currentlytadeq emetropolitan <br />Y s o°glen areas, <br />and, v our opinion, only • <br />competitive experience, alreadyd. COST, however. has significant <br />which it operates, competing with warehouses in most of the mark <br />; etc In <br />5. CrJST has passed the critical junctures to col . Preopening and interest costs (S 1.6 million rand �S 1.2 <br />`/lest halt Y Despite heavy <br />�. the company reached profitability ahead o million, respectively, in the <br />previously mentioned gross margins and operating expectations. The <br />the lowest -cost producer in the induct <br />9 ratios make COST at or very <br />versus most eompetltors, Its units are Industry. <br />It significant pricinganear <br />totals excel: -d only by Price Club and Sam-s (about t I I at "'rrtillion average evolume. <br />estimated annual PQr-store revenues, respectfvef out Si 15 minion and S60 million <br />unitac. COST's year-to-date same -store sale t gains i, both of which have much olds <br />important, like -store business and group g ns are averaging o r <br />substantially.yy 9 P memberships are up even more 3®!o. As <br />bile these increasez are obviously PositivelyInfluenced Immaturity. combined with the company•s rapid <br />strong momentum. A d Oxpansion the t re a g by store <br />y are a good indicator of <br />5. The corrrAanY's linarycrZ/ structure and <br />eutr,�oeotr�r�► c�rra�,r•terrr� market opPa4t'unrtres should �►//ow a <br />se£urtties and growth, Having recently called Its earlier c,3nver'ti <br />Surop¢°s leading <br />there to common stock by its major investor b!e <br />that time. Other thantleaseket!• COST v►°bs left with virtually n actor (Carretour, <br />debt structure. Current s. and a signlficantldiminished <br />1 0 longterm debt at <br />position (2.2-to-1,d £u rs t ratio). <br />a )tani,dterest burden. its <br />convertible financing (April 1S8G� should allow it to <br />Of least late into 1987. In fact. COST's cash scent 5115-million <br />finance even its rapid growth <br />rttiffion, Providing n Position now totals abouit S 135 <br />g near -term interest -income oAAortunitits arid, even <br />sizable rearestate negotiatin <br />cost situation. and strong sales£po t, The £e an m. on -budget important, <br />growth in the two t4 three A Y s improving .returns, <br />should allow it at least 50% annual EpS <br />assume no acquisitions, years beyond rlRcal 19®6. Our forecasts, shown above. <br />2' A4dAd9rmerrr ,►s e�rirtngt/Y str,�nq and much <br />most �"�►rehc► I se corer more eirperienced than the mans discount -store backgrounds similar t. Much o <br />P management managements of <br />9$1nent was trained in warehouse and <br />Opinion. COST's warehouse managers' �hhot <br />troien Price Clubs management. In -our <br />industry. and its central managementA Ce and training are not exceeded in the <br />P rtant, warehoL.-e tfisc;piing The tee ninhigh evel Of talent. <br />are Provided stores are very Sophisticated <br />the 21 Prtsent warehouse rnan,� . Particularly for a corn and systems *hat <br />their background, and, In afl but one case, Mailing A s so Young. Of <br />fifes, 16 have some kind of warehousing experience in <br />COST. In general. the levels of background are ling experience before taming to <br />'competition. a far superior to those of the I <br />R1 <br />