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Originally Posted by Slava
No, share buybacks do not impact profit margins. Share buybacks will impact earnings per share, and that is not the same thing, and not what I'm talking about.
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Fair enough if you don’t want to take that into consideration but it factors into where the money ends up.
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I think what is naive, is that there are plenty of people who are explaining that the margins in grocery are not as high as the public grocery store supporters seem to imply.
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Are you implying that I’m in favour of public grocery stores?
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And now, you toss up the red herring of building new properties as though this is somehow part of the COGS, and imply that rather than report income they're just building new stores. Well, in December 2020 they had 2431 stores and at the end of 2024 they were at 2455. It's quite a take!
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I don’t see how you can’t consider that to be a relevant factor when looking at the big picture of how investors make money. We can discuss the unnecessary spending and waste that occurs in these businesses which obviously will get passed along to the customers if you’d like.
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So, here's the pure facts. Profit margins are not wildly higher than they were pre-covid. They went from 29.66 to 31.51, which is a little under 2% growth from 2019 through 2024. Hardly egregious. Net profit margin rocketed up to an eye-watering 3.56% through 2024. Surely you can't think that this is gouging?
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Gouging is a little subjective but the fact of the matter is that their revenues are significantly higher and the profit margins have increased. So it’s hard not to see that and not reach the conclusion that they’re making more off of selling the same goods than they did previously.