Recall, the profit and loss statement showed top-line growth, but weak metrics below the net sales line. Let's take a look at demand growth, on a rolling twelve month basis.
What we see is a business that was struggling, then reversed flat growth in the fall of 2011. Since then, growth has been reasonably robust. On the surface, things look good.
The next chart I look at is a rolling twelve month analysis of twelve-month buyers.
What do you see?
This business had marginal growth in the number of twelve-month buyers, followed by a significant drop that started in late spring 2012.
The customer file is in decline. Top-line growth continues. What do you think is happening at Kaley's Knits?