Tuesday, September 07, 2010 1:41:35 PM
I look at their product and their projected sales this way:
Lowes sells hundreds if not thousands of these cabinets across the country every day. They have over 1700 stores. The fact that EXPH has been given a 20,000 piece order over an indeterminate amount of time implies that this is nothing more than a “trial” sample for Lowes. Lowes will test interest before they bring on bigger orders.
As for the high end kitchens, people that put in high end kitchens are not looking for discount furniture at Lowes, they are putting in custom cabinetry to fit their style of house. The projected sales are relatively low (in total Kitchen Qty.) when you consider what it costs for a full kitchen set of cabinets. For example, $10,000 a day in product would basically build one kitchen with hardware every 2 days. That is only 180 kitchens per year. Not exactly a wide distribution.
It is great that the company is throwing out projected sales (even if they are low numbers) but nobody has any idea what kind of margins are on this furniture and how that relates to turning a profit. I don’t see these sales turning the corner on profit and thus I see continued dilution.
Getting in to a Lowes is great; making an impression that turns into future sales is another thing.
For anybody that thinks this is a great investment, I suggest you go to Lowes on line or Home depot on line and look at their competition and their prices. Look at the full array of products offered by one manufacturer and then look up that manufacturer. My bet is, you will be amazed at the competition out there and the limited margin to be had on these products.
BTW…I have never owned a hedge fund and do not now. I am not even in the financial services industry so I am not sure where your info comes from.
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