The Cash Flow Growth(tm) and the Retail Industry: Signs of a Slowing?
Mulford, Charles W.
Singh, Vipul Pratap
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A slowing U.S. economy is impacting retail sales and hurting the retailers. The purpose of this study is to examine the extent to which problems seen at the macro level are hurting the retailers as a group and within four industry sub-groups, department stores (fashion), department stores (variety), warehouse stores and dollar stores. We look at the performance of 22 retailers using the Operating Growth Profile(tm); and Free Cash Growth Profile(tm);, two metrics that are very useful in evaluating a firm's ability to generate cash flow as it grows. While the Profile for the retail industry did improve each year between 2002 and 2006, a decline is noted in the twelve months ended with the third quarter of 2007. However, not all industries are declining. We noted modest improvements for the warehouse stores and dollar stores.