Hi all, I've taken a quick look at TPW & compared it to Nick Scali & Adairs. My questions are:
Gross Margins are around 40% compared with NCK & ADH. Is this due to private label & lower pricing?
EBIT margins are pretty low 4-5% compared to NCK & ADH.at around 20-30%, appears due to SG&A margins on TPW being near double that of NCK & ADH.
Net Income margins are low compared to NCK & ADH. 4% for TPW & 10-20% for NCK & ADH. Is it again due to lower costs/private label?
I also note inventory turnover is 4x higher for TPW than NCK or ADH.
From my quick overview & without diving deeper into TPW it appears that they are possibly offering economies of scale being the low cost provider by passing cost savings onto the customer which is lowering their margins but allowing them to take market share & grow. This is fairly evident in their inventory turn being 4x greater.
Can anyone advise if im on the right path here or if i'm missing something?
TPW Price at posting:
$12.67 Sentiment: None Disclosure: Not Held
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