With the company is valued at only 21% of sales, a valuation typically reserved for low margin grocery store chains and office supply companies. The company has adequate liquidity with a $20M undrawn revolver, $38M in cash (40% of its market value) and cash flow breakeven now. Once the distribution center is completed next year, $10M in cash flow will be freed up.
Two years ago, BODY was showing 14% two-year comps, so the company had its merchandising strategy right in the past. If the new strategy is working, comps over the next three quarters should start coming in at less than minus 8 to 10%, which would move the two-year comp to better than -20%.