patagonia
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1. Be prepared to state -- in bullet point format using less than three minutes of class time -- what the numbers tell us in this case.
Sales grew more than three times between 1986 and 1989 and profits rose by approximately 30% each year.
Lost Arrow's geographical expansion in Europe required a lot of investments (ex. inventory building) and was risky given the different nature of the European market
High profit margins of approximately 46%. Patagonia priced its products as Kristine said "well beyond our customer base" in the later periods.
Gross margins 1987-1988:
Consolidated Patagonia Mail Order Retail Chouinard Equipment
44% 40% 63% 63% 30%
Pre tax profit margins (I distribute the interest expense over the different business segments according to the revenue breakdown percentage).
Consolidated Patagonia Mail Order Retail Chouinard Equipment
9.4% 26% 25% 3% n/a
Chouinard Equipment was the only division that lost money
SG&A as a percentage of revenue:
Consolidated Patagonia Mail Order Retail Chouinard Equipment
33%% 11% 36% 58% 36%
Revenue breakdown:
Consolidated Patagonia Mail Order Retail Chouinard Equipment
100% 70% 10.8% 12% 6%
Retained Earnings grew by 50% from 1987 to 1988 and by another 70% from
1988 to1989...