Common-Size Income Statement
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
- Gross Profit Margin
- Gross profit as a percentage of net sales displayed a fluctuating trend over the periods analyzed. It started at 35.63% in early 2018, gradually increasing to 36.24% by early 2020, before sharply declining to 31.68% in early 2021. Subsequently, it rebounded strongly to reach 39.62% by early 2023, marking the highest margin within the timeframe.
- Cost of Sales
- Cost of sales consistently represented a significant portion of net sales, fluctuating between -68.32% and -60.38%. A notable increase in this cost occurred in early 2021, reaching its peak at -68.32%. However, in the following years, it decreased substantially to -60.38% by early 2023, which corresponds to the recovery seen in the gross profit margin.
- Selling, General and Administrative Expenses (SG&A)
- SG&A expenses showed an increasing proportion relative to net sales from -21.87% in early 2018, peaking at -25.73% in early 2021. After this peak, SG&A costs improved, declining to -23.46% by early 2023, but still remained higher than the levels observed at the beginning of the period.
- Impairment, Restructuring, and Other Costs
- These costs were only recorded in early 2021 at -1.86%, which likely contributed to the sharp decline in operating income and net income in that year. There were no such charges reported in other years within the dataset.
- Pre-opening Expenses
- Pre-opening expenses decreased steadily, starting at -0.41% of net sales in early 2018 and falling to -0.10% by early 2023, indicating enhanced efficiency or a strategy of limiting new store openings or related expenditures.
- Operating Income
- Operating income exhibited a declining trend from 13.35% in early 2018 to a significant low of 3.85% in early 2021, corresponding with the period of elevated costs and impairment charges. Afterwards, operating income demonstrated a substantial recovery, reaching 16.05% by early 2023, surpassing the initial levels observed in 2018.
- Interest Income (Expense), Net
- This item remained relatively stable and close to zero throughout the periods, ranging from 0.08% to -0.09%. No material impact on overall profitability trends is evident from interest income or expense fluctuations.
- Income Before Income Taxes
- The trend in income before income taxes closely mirrored operating income, declining sharply to 3.76% in early 2021 before recovering to 16.10% by early 2023, indicating resilience in earnings power despite challenges.
- Income Tax Expense
- Income tax expenses as a percentage of net sales varied between -0.90% and -3.94%. The lowest tax expense was recorded in early 2021, consistent with the dip in pre-tax income. The tax rate increased again in the later periods, aligning with improved profitability.
- Net Income
- Net income as a percentage of net sales reflected significant fluctuation, declining from 9.44% in early 2018 to a low of 2.86% in early 2021. This was followed by a robust recovery, with net income increasing to 12.17% by early 2023, representing the highest net income margin within the given timeline.
- Overall Observations
- The financial data reveals that the company experienced a challenging period around early 2021, characterized by increased cost pressures and a one-time impairment charge, resulting in reduced profitability. Following this period, the company demonstrated strong financial recovery with improved gross margins, reduced cost of sales, and a decrease in SG&A expenses relative to sales. Both operating and net income margins reached their highest levels by early 2023, indicating enhanced operational efficiency and effective cost management strategies post-challenges.