TCS Print was “OK”. Business trends are not good, but that’s generally known, comps are down 20%, and earnings have collapsed. On the positive side, this does look like the bottom from a rate of change perspective as the company is guiding the upcoming Q to down mid-teens with compares continuing to ease. On earnings it guided down the year by about 25 cents--mainly on margin pressure from mix and investing in wages--tempering full year revs by 5mm. Cash flow looked ok and the CFO reiterated being free cash flow neutral to positive, which is an important piece to the near term story as the stock is trading like there will be some sort of dilutive capital raise before the earnings and free cash flow recovers. The company is going to be opening a total of five new stores in fiscal 2023 and four new stores in fiscal 2024, so unit growth story looks intact, though the 2024 growth looks intentionally low as the company prioritizes cash and other investments in the looming recession. This is one of our baggers in the Bone, Bagger, or Bust call. Over the near term earnings and the home retail industry are still under pressure, though with comps getting less bad. TAIL bagger case still intact and near term cash flow looking ok. Best Idea Long.
