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Non-Tech : RAINFOREST CAFE -- Ignore unavailable to you. Want to Upgrade?

To: SE who wrote (3965)	2/4/1998 11:00:00 AM
From: Dylan	Read Replies (2) \| Respond to of 4704

Here are my preliminary calculations based on RAIN's earnings report: (I've included definitions for those unfamiliar with these terms) 1997 1996 1995 Operational Margin (Income from operations/Revenues): 4th Quarter .186 .165 Year .185 .183 Profit Margin (All income/Revenues) (pre-tax, including debt write-off) 4th Quarter .180 .203 Year .178 .190 Profit Margin (pre-tax, excluding debt write-off) 4th Quarter .188 Year .180 Profit Margin (post-tax) 4th Quarter .115 .130 Year .114 .122 .087 Annual Growth Rate ( (year a earnings)*AGR=year b earnings) 1996-1997 62% 1995-1996 156% 1995-1997 110% (annualized) Profit Margins increased 90% from 1995 to 1996, but decreased 13% from 1996 to 1997 From this, it seems that RAIN's growth is due to expansion, but they have become a less profitable operation. Possible causes that I can think of include 1) the opening of several high cost locations this year 2) Profits Margin on retail sales decreased from 42% for Q4 1996 to 28% for Q4 1997 and from 29% to 28% for Year 1997. So while sales were up 46% from quarter to quarter, the Christmas shopping season was not nearly as lucrative. 3) they focused too much on expansion and too little on the markets they entered. -Dylan