How is business at 99 CENT ONLY STORES?

[Mr5150]

Ah! The five and 10 cent store of the present age!

Nothing new. Google it.

[BeerGeek40]

Originally Posted by City-duck

Every 99c store I've been to in CA has been busy regardless of the time I've went. They were also very clean and organized.

Do i see employees smiling all the time? No. But it's better than most Targets and Walmarts I go to. I also don't get the feeling like some plain clothes loss prevention personnel is looking at my behind with every isle i walk past.

I also feel like they deliberately understaff. I'm waiting to checkout much longer than I should for buying a few items.

I have bought cheap wine there a few times during the day and nobody gave me any dirty looks so that's a thumbs up.

Should I be looking at the stock as if it were on sale?

Thanks. Good analysis.
The 2019 bonds are selling for .40 to .50 on the dollar. They have gone straight down in value over the past 6 months.
Sounds like the stores are doing fairly well, and I plan on hanging on to the bonds. Just picked up my first interest payment. The coupon yield is 11% so it was a nice payment.

[thelopez2]

Originally Posted by BeerGeek40

Thanks. Good analysis.
The 2019 bonds are selling for .40 to .50 on the dollar. They have gone straight down in value over the past 6 months.
Sounds like the stores are doing fairly well, and I plan on hanging on to the bonds. Just picked up my first interest payment. The coupon yield is 11% so it was a nice payment.

Why would you worry if the price goes down, it'd seem like a good idea to buy more since the yield would increase. I've never bought bonds but at 11% you have me thinking about it.

[BeerGeek40]

Originally Posted by thelopez2

Why would you worry if the price goes down, it'd seem like a good idea to buy more since the yield would increase. I've never bought bonds but at 11% you have me thinking about it.

OK -- BONDS 101 here....
All bonds are based on a $1,000 face value when issued and also when they mature... i.e. the holder gets paid back the principal. The 11% is the annual rate that is paid ON THE $1,000 face amount. Interest is paid twice a year. So I hold 10 of these and just picked up a $550 interest payment and will get the next one in June '16.

With the bonds selling at about $450 right now the 'effective yield' is much higher.

But to answer your question, what do I have to worry about? Well, plenty. If 99 Cents Stores isn't able to pay back the bonds in 2019 when they mature, and isn't able to refinance them, the bondholders could be stuck for a big loss.

[SOON2BNSURPRISE]

99 Cents Only Stores Reports Third Quarter Fiscal 2016 Results - Dec 14, 2015


Third Quarter Fiscal 2016 Overview:

• Net sales increased 2.8% to $491.5 million in prior year
• Same-store sales decreased by 3.9%
• Adjusted EBITDA1 was $5.1 million compared to $27.1 million in prior year
• Net loss was $152.6 million compared to $3.8 million in prior year
• Felicia Thornton named permanent Chief Financial Officer & Treasurer

99 Cents Only Stores LLC (the "Company") announced its financial results for each of the quarter and nine months ended October 30, 2015.
Geoffrey Covert, President and Chief Executive Officer, stated, "With a new senior executive team now in place, we are aggressively identifying the issues that have led to our disappointing results in recent quarters. I see great possibilities for 99 Cents Only Stores and look forward to building on the foundational strengths of our business while providing the direction and discipline to return the organization to profitable growth. Our new leadership team is energized and working with a sense of urgency to address the challenges that we face and the opportunities that lie ahead. To this end, we are focused on improving the customer experience, reducing shrink and scrap, enhancing inventory management practices and getting the right products to the right stores at the right time. These priorities are designed to focus the organization and drive improvement in our financial and operational performance."

[SOON2BNSURPRISE]

http://www.prnewswire.com/news-relea...300098252.html

Gross margin, as a percentage of net sales, was 30.9% in the first quarter of fiscal 2016, a decline of 200 basis points from the first quarter of fiscal 2015. Gross margin was negatively impacted by greater levels of promotional activities, higher inventory shrinkage and scrap, and additional distribution expenses. Selling, general and administrative expenses as a percentage of net sales was 29.7% in the first quarter of fiscal 2016, an increase of 340 basis points from the first quarter of fiscal 2015. Selling, general and administrative expenses as a percentage of net sales increase was primarily driven by store level payroll-related and occupancy expenses, depreciation and amortization and advertising costs. Selling, general and administrative expenses as a percentage of net sales was negatively impacted by the recent opening of 40 net new stores since the same period of last year and an increase in minimum wage in California.
Net income was $1.2 million in the first quarter of fiscal 2016 compared to net income of $9.6 million for the first quarter of fiscal 2015. Net income as a percentage of net sales was 0.2% for the first quarter of fiscal 2016, compared to net income of 2.0% for the first quarter of fiscal 2015. Adjusted EBITDA was $25.0 million in the first quarter of fiscal 2016, compared to $45.7 million in the first quarter of fiscal 2015. Adjusted EBITDA margin was 4.9% compared to 9.6% over the same period.
Commenting on the results, Andrew Giancamilli, Interim President and CEO stated, "While we are disappointed with the financial results of this past quarter, we remain confident that the core business strategy of 99 Cents Only Stores remains strong. We have clearly identified the challenges underpinning our first quarter results and are taking specific actions that we expect to drive near-term performance improvements. Over the past 18 months, we have undertaken some aggressive growth initiatives – including expanding our store network, enhancing our overall product offering, upgrading back office functions of the business by investing in technology and human capital, and the opening of new distribution centers. Now, the Company is focused on operational execution in order to capitalize on these initiatives and the continued efforts of our dedicated employees and senior management team to expand the potential of our unique brand."

[BeerGeek40]

Originally Posted by SOON2BNSURPRISE

99 Cents Only Stores Reports Third Quarter Fiscal 2016 Results - Dec 14, 2015


Third Quarter Fiscal 2016 Overview:

• Net sales increased 2.8% to $491.5 million in prior year
• Same-store sales decreased by 3.9%
• Adjusted EBITDA1 was $5.1 million compared to $27.1 million in prior year
• Net loss was $152.6 million compared to $3.8 million in prior year
• Felicia Thornton named permanent Chief Financial Officer & Treasurer

99 Cents Only Stores LLC (the "Company") announced its financial results for each of the quarter and nine months ended October 30, 2015.
Geoffrey Covert, President and Chief Executive Officer, stated, "With a new senior executive team now in place, we are aggressively identifying the issues that have led to our disappointing results in recent quarters. I see great possibilities for 99 Cents Only Stores and look forward to building on the foundational strengths of our business while providing the direction and discipline to return the organization to profitable growth. Our new leadership team is energized and working with a sense of urgency to address the challenges that we face and the opportunities that lie ahead. To this end, we are focused on improving the customer experience, reducing shrink and scrap, enhancing inventory management practices and getting the right products to the right stores at the right time. These priorities are designed to focus the organization and drive improvement in our financial and operational performance."

That is fantastic work on your part to dig up this information.

Let's boil this down to the basics. They lost $152 million in the recent quarter, and have 391 stores. That means they lost on average, about $32,000 per week, per store, in this quarter (which to be fair did have a large 'goodwill' accounting item), but still, the numbers look pretty weak. Management better get their head out of their posterior and fix things.

[tickyul]

Walmart is losing some of my business to 99-cent type stores.

[acercode]

Originally Posted by Howiester

Hugely popular with poor people

Wrong.

Many locations are in affluent locations and their parking lots are full of Mercedes, BMW, Lexus etc. I shop there in my Lexus too.

[NoMoreSnowForMe]

Originally Posted by tickyul

Walmart is losing some of my business to 99-cent type stores.

In my town, Walmart is competing with the dollar store here. There are so many different dollar stores that I can't keep track or care about which one is which.

But, the few things I really care about buying from the local dollar store, Walmart usually carries for the same price or less. Often, I'll go to the dollar store instead, though, to avoid the lines and parking hassles at Walmart.

But, if someone wanted to also shop for groceries, etc., they're going to go to Walmart, where they can also pick up the dollar items.

For instance, I love the dollar candles that are scented and come in a glass jar with lid. I can buy them for $1.00 at the local dollar store. I can get the equivalent at Walmart for 97 cents. If I need to go to Walmart for other items, I'll just buy my candles there, too.

But, I can tell you that any dollar store of whatever brand, will be busy. That's been my experience. But, if they're not the only dollar store in town, they'll have competition from the other dollar stores and stores like Walmart.