Yea have a look at it Tim. I came across this a couple weeks...

Yea have a look at it Tim. I came across this a couple weeks back.

Within the annual report they highlight how they depreciate the memberships (due to them having a 2 year lifespan). They also depreciate the fit-outs.
I THINK (based on the last time I read it), there were 22 fit-outs that still needed to be done to be converted to the Glow 2.0. In addition to this, they are obviously opening stores every year which they also claim.
After they have done the glow 2.0 conversion, I am unsure of the requirement to change again. It seems their new approach is to use the product packaging to create the atmosphere rather than using the fit-out. This is why I am giving a lower weighting to depreciation considerations for this business. Normally I would look at a business and consider that the depreciation amount that is being expensed will go back into the business to replace the asset. In this situation though, they are using shelves. They don't have the same pressures as say, a plastics manufacturing company. They could continue using the same shelves for the next 20 years without needing to replace them.

Disregard the yellow box, I was just using a FactSet link to get to this document quickly.

Add the depreciation back, and then apply tax. The 2023 would of been around 0.40 EPS in such a hypothetical scenario. Scenario aside, there is a lot of cash in this business. Its crazy for the price.