On Tuesday, Sept. 26, clothing retailer Dress Barn (NASDAQ:DBRN) released full-year earnings for the 2006 fiscal year ending July 29.

  • A retailer without receivables might look odd, but there's a perfectly logical explanation: Dress Barn's stores do accept credit cards, but the credit processing and all risk involved is passed on to Alliance Data (NYSE:ADS) in exchange for processing fees. The transaction is then recorded as a net cash sale.

  • With sales growth outpacing that of accounts payable, and a largely flat inventory count, the cash conversion cycle shortened considerably. That's efficient retailing, folks.

  • There might not be a cash flow statement to chew on, but the increase in cash on hand speaks volumes. It would just be nice to see where all that moola came from. The first three quarters of the year saw $31.2 million of capital expenditures and $129 million of operating cash flow, mostly from earnings, depreciation, and changes in inventory levels.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

FY 2006

FY 2005

Change

Sales

$1,300

$1,300.3

$1,000.3

30%

Net Profit

--

$79.0

$52.6

50.2%

EPS

$1.12

$1.15

$0.86

33.7%

Diluted Shares

--

68.7

61.2

12.4%


Get back to basics with a look at the income statement.

Margin Checkup

FY 2006

FY 2005

Change*

Gross Margin

40.50%

37.85%

2.65

Operating Margin

10.15%

9.27%

0.88

Net Margin

6.07%

5.25%

0.82
*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

FY 2006

FY 2005

Change

Cash + ST Invest.

$153.7

$42.4

262.3%

Accounts Rec.

$0.0

$0.0

0%

Inventory

$170.5

$167.6

1.7%


Liabilities

FY 2006

FY 2005

Change

Accounts Payable

$121.2

$107.7

12.5%

Long-Term Debt

$144.8

$155.9

(7.2%)



Learn the ways of the balance sheet.

Cash Flow Highlights
The company did not supply a cash flow statement at this time. It hurts, but I suppose we'll get by.

Find out why Fools always follow the money.

Retail Checkup

FY 2006

FY 2005

Change

Days in Inventory

79.8

83.5

(3.8)

Days in Receivables

0.0

0.0

(0.0)

Days Payables Outstanding

54.0

51.2

2.8

Cash Conversion Cycle

25.8

32.3

(6.5)



Read up on cash conversion metrics.

Related Companies:

  • Target (NYSE:TGT)
  • JC Penney (NYSE:JCP)
  • Kohl's (NYSE:KSS)
  • Ross Stores (NASDAQ:ROST)
  • Charming Shoppes (NASDAQ:CHRS)

Related Foolishness:

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At the time of publication,Fool contributorAnders Bylundhad no position in any company mentioned. Fool rules arehere.