Looking for some help on a retail name.
The Company doesn't discuss its four wall model, so I'm trying to do this on my own, but I haven't looked at a lot of retailers. So, here's what I'm thinking:
Year 0 = CapEx + Inventory are upfront costs. I use historical data to figure out CapEx / New Store and Inventory / Store (or could do Inventory / Sq. Ft., but I'll stick with per Store)
Year 1 = Revenue / Store based on historical average, but I will discount this as new store revenue needs to ramp
Subtract COGS / Store (COGS excludes rent)
Subtract Direct Operating Expense / Store (includes wages of store workers and rent)
That should equal the four-wall contribution, right?
Maybe add back D&A / store to get a cash contribution?
If I want to calculate an IRR how many years out should I go?
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