Monday, March 05, 2018 6:15:49 PM
Net Loss is highly correlate to sales. Sure they can grow sales burning the 19MM in the bank. Given current ratios they could afford to purchase another 130MM in sales, before becoming cash strapped again in 2-3 years. Given 10 years trying to make this concept work and that sales still require loss producing subsidies what happens then how do you think this will end. Taking the concept to more markets and growing sales beyond 60MM+ is simply increasing their cash burn rate.
Eventually they will need to see what happened when SG&A is brought to sustainable levels. Sure sales will fall, but do they stay above store delisting thresholds. If not sales go back to 0.
My Predictions for Q4 2017:
Sales 14MM
SG&A 8.1MM
Net Loss -1.9MM
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