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Валгрин Ко. Message Board

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  • extrainer extrainer Aug 21, 2002 8:52 AM Flag

    Banker's Analysis

    Good analysis, Slee. The one thing that's a little bothersome about this is the required sales growth. Stated in inflation-adjusted dollars you said store sales per square foot need to increase from $993 to $1541. I'm no retail expert either but this seems like a pretty large jump. If it can be done, though, I'd put my money on WAG's management to figure out how to do it.

    The other thing regarding the Banker's analysis and prescription costs.

    >>Not to mention that drug costs can not continue to climb straight north, within the next five years Congress will do something to curb drug costs, this will cut SSS growth to something in the neighborhood of 5 to 6%.<<

    I agree that this is merely one person's opinion, but the one question you have to ask is who's going to bear the brunt of the cost cutting. It won't be just the retailers, it will be the pharmaceutical companies as well. So while WAG's revenue may suffer as a result, they should also be making up some of it on their cost from their suppliers. Is 5 or 6% the right number for SSS increases, who knows? Until we see a specific proposal, there's nothing to evaluate.

    Nice to exchange in meaningful discourse about the industry and the stock instead of baseless accusations and name-calling though, isn't it? I'm sure that will come once Zeus and Heyman limber up their fingers and disengage their brains.

 
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