stockholders equity (deficit) in $K from 403,200 to (1,347,099)
total debt in $K from 1,935,618 to 3,354,317
stores from 4,056 to 4,832
net sales per store in $K from $1,525 to $1,675
think about it, per store sales have only increased by $150,000 over a 5 year period aprox. $30K per year or close to 2%.
Now lets look at the future. Over the next 12 months they need $ 1,038,291 to keep the lights on, that does not include neither new store capital requirements nor share repurchases.
Best case cash flow will be a but higher than 2011 of $ 1,291,538 on average they buy 6M shares per year,at current share price that would mean $1.9B, that ain't happening.
Some trivia, please name 5 publicly traded retailers with negative shareholder value, negative working capital and above 100% accounts payable to inventory. Maybe if these techniques were so good more corporations would follow them?
I would agree that if it were for AZO they would purchase the float down to 10M, after all how else will they grow their EPS? That said, the slight issue with that argument is they need money to buy shares, vendors are already financing their inventory (by about $300M). $3.5B in debt with $1.3B in cash flow. I am sure they'll figure out a way. Oh I know, Brazil!
I am not making a case, simply stating the facts. At some point the company had positive shareholder equity, a below 100% ap/inv, less than $2B in deby and they didn't have 4,800 stores to maintain. Just because the ponzi hasn't blown up, it doesn't mean its correct, ask maybe you can interview Madoff in jail to ask how long he kept that story going. But then again, they'll spin the story and go for international growth, only issue with that is you need money, so they'll issue convetible debt at great rates to ESL? Don't know, but current US expansion and share repurchasing can't be sustained absent top line growth in my humble opinion.