- After a 17% decline, the risk/reward profile of DEST is still not favorable given all the headwinds.
- Negative comparable Same Store Sales "SSS" trend continues, and I do not expect positive annual SSS until 2016.
- In Q3 2014, inventory was up 7.6% year-over-year but comps were negative 5.3%. Gross margins most likely continue to decline so that excessive inventory can be cleared up.
- Closing underperforming stores, lowering free cash flow due to relocation expenses, and declining U.S. birth rate are all valid concerns for prospective investors in DEST.