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Alias Born 09/26/2019

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Tuesday, 12/10/2019 11:09:50 AM

Tuesday, December 10, 2019 11:09:50 AM

Post# of 1193
Prendergast: "In addition, based on our inventory planning and analysis, we determined that we have operated with less than optimal inventory levels in recent years, and therefore, have increased our inventory to align more appropriately with our holiday season plans.”

It kind of sucks hearing this and seeing it in the ER, but I think he's right. I remember seeing on some of their social media posts that items are "back in stock" or seeing some items say "out of stock" on their website which tells me they are having hard time keeping inventory up which could and probably is hurting their sales.

The good news is that they were able to buy $7m more in inventory this year compared to last year while also having a much smaller loss. To put that number into perspective, $7m is $2.43/share. If they kept the same inventory as the previous year it would have been a positive earnings.

It stings a bit having to pay for it, but at least inventory is an asset that can be sold later on. Everything else in the ER looked pretty good to me. SG&A down, margins up, comp. sales slightly up and with fewer stores. I also really like the improvements to the website over the last 6 months. It still sounds like the turnaround is going smoothly to me, but with the negative ER the stock price won't reflect that.


One thing I need to look more into is the big Q4 loss last year. Maybe I'll look at that after work today to see what happened there.
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