Question-and-Answer Session
Operator
All right. Thank you, sir. We will begin the question and answer session. (Operator Instructions) Our first question comes from the line of Jeff Klinefelter of Piper Jaffray. Please go ahead.
Jeff Klinefelter - Piper Jaffray
.
Yes, thank you. Ed, a couple of questions for you. First of all, could you talk a little bit about your new store performance—the 2005, 2006, and maybe 2007 classes—just giving us a sense for how they have performed in terms of the maturity curve and if there are any differences or nuances as you’ve move into the Midwest—as an example of a new market.
R. Edward Anderson
Okay, I’ll give you that answer at a high level, Jeff, and Bruce may fill in some of the blanks. The 2005 group of stores was a terrific group of stores followed by a group of stores that was just about as good in 2006. And the 2007 stores, obviously we don’t have full-year results for yet, but have performed very well and are exceeding our pro forma numbers. As far as geographically speaking, we are happy to report that from the Midwest, in the Cleveland area moving in to Detroit and Chicago this past year, we’ve have outstanding stores results.
Bruce D. Smith
I’ve got a couple of things I’ll add to that, Jeff. The sales in the stores that we opened in 2005 and 2006 reached $1.6 million on average during their first twelve months, and consistently achieved cash-on-cash returns in excess of 100%.
Jeff Klinefelter - Piper Jaffray
Okay, and how about the comp performance as those new store classes have matured in the following year? For the 2005 for example, is there anything outside of the normal average chain comp that you’re seeing?
Bruce D. Smith
No, there’s not. They’ve pretty much come in line with the rest of the stores and that’s not inconsistent with what we’ve seen with other stores, after their first full fiscal year.
Jeff Klinefelter - Piper Jaffray
Okay. So you’re not seeing any under-performing markets, in new markets that you’ve entered, at this point relative to your pro forma plan or your average in the last two years?
R. Edward Anderson
That’s exactly right. Our new store performance in new markets—and I guess the specific new markets you’re talking about are the Midwest markets of Columbus, Ohio, Cleveland, Ohio, Indianapolis, Indiana, Detroit, Michigan, and Chicago, Illinois—all those markets have performed as well or better than the averages of other markets. We still have one under-performing market, which we told you all in previous phone calls, that we still haven’t really solved yet, and that’s the Baltimore market. With that exception, when that market was first opened about three years ago, we’ve had outstanding success in all the other new markets.
- To read the full transcript on Seeking Alpha, click here »
