Ann: ADH Trading Update, page-7

Great sales performance, just look at DSK which also announced this morning, -10% LFL. In-store was probably a little weaker than expected, so much has transitioned to online now, strategically they need to think about their store footprint imo. Mocka continues to be a knockout acquisition despite the falling out with the founders.

Agreed EBIT was much weaker than expected. Even if you pullback 400bps off the elevated gross margin last year that's still only a ~$10m impact. So the balance must be some pretty hefty escalation in SG&A. "The initial issues with the new National Distribution Centre were significant" sounds like corporate spin for it was a total clusterf**k...I believe someone on these forums with some warehouse experience flagged potential issues with a DC consolidation project, looks like those have come to pass and then some.

Having a much higher cost base is going to be a challenge to manage going forward, especially if we head into a softer sales environment. Need some more management commentary at the actual results but it's generally not a good sign if you have bloated costs during buoyant sales. Then you're scrambling to cut back when things are tougher, being typically procyclical. Great management is able to maintain really strong cost discipline during good times and is actually able to invest more during the downcycles when everyone else is cutting back.