On March 22, Borders Group
- Sales increased by 3%, thanks to a 2.3% increase in sales at domestic Borders superstores. Comparable-store sales in the segment decreased by 2.8%.
- Gross margins declined 300 basis points, because of increased promotional discounts, de-leveraging of fixed occupancy costs, and non-operating charges.
- By 2009, the company expects consolidated EBIT margins of 5% to 6%, compared to 1.8% currently, driven primarily by sustained same-store sales growth.
(Figures in millions, except per-share data.)
Income Statement Highlights
Q4 2006 |
Q4 2005 |
Change |
|
---|---|---|---|
Sales |
$1,519.0 |
$1,475.0 |
3% |
Net Profit |
($73.6) |
$119.1 |
N/A |
EPS |
($1.22) |
$1.78 |
N/A |
Diluted Shares |
60.4 |
67.0 |
(9.9%) |
Get back to basics with the income statement.
Margin Checkup
Q4 2006 |
Q4 2005 |
Change* |
|
---|---|---|---|
Gross Margin |
30.1% |
33.1% |
(3.0) |
Operating Margin |
(2.1%) |
13.1% |
(15.2) |
Net Margin |
(4.8%) |
8.1% |
(12.9) |
Margins are the earnings engine
Balance Sheet Highlights
Assets |
Q4 2006 |
Q4 2005 |
Change |
---|---|---|---|
Cash + ST Invest. |
$120.4 |
$81.6 |
47.5% |
Inventory |
$1,452.0 |
$1,405.9 |
3.3% |
Liabilities |
Q4 2006 |
Q4 2005 |
Change |
---|---|---|---|
Accounts Payable |
$631.4 |
$660.3 |
(4.4%) |
Long-Term Debt |
$547.8 |
$212.5 |
157.8% |
The balance sheet reflects the company's health.
Cash Flow Highlights
YTD 2006 |
YTD 2005 |
Change |
|
---|---|---|---|
Cash From Ops. |
$47.7 |
$169.9 |
(71.9%) |
Capital Expenditures |
$204.2 |
$196.3 |
4% |
Free Cash Flow |
($156.5) |
($26.4) |
N/A |
Free cash flow is a Fool's best friend.
Related Foolishness:
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Borders Group is a Motley Fool Inside Value recommendation. To learn why Philip Durell bookmarked it as an attractive opportunity, sign up today for your free 30-day trial.
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