Brand House Collective, Inc. (NASDAQ: TBHC)

Sector: Consumer Cyclical Industry: Home Improvement Retail CIK: 0001056285
Market Cap 27.83 Mn
P/B -0.63
P/E -1.00
P/S 0.07
ROIC (Qtr) -15.36
Div Yield % 0.00
Rev 1y % (Qtr) -9.58
Total Debt (Qtr) 192.92 Mn
Debt/Equity (Qtr) -4.38
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About

Kirkland's, Inc., a specialty retailer operating under the Kirkland's Home brand, is a significant player in the home décor and furnishings industry. The company's mission is to become the go-to destination for seasonally relevant home décor, furnishings, and gifts by offering on-trend, curated product assortments at competitive prices. Kirkland's operates primarily in the United States, with a strong presence in the southern region, and competes with major retailers such as HomeGoods, Walmart, and Target, among others. Kirkland's generates...

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Investment thesis

Bull case

  • Tangible assets of 229.23M provide robust 10.70x coverage of other current liabilities 21.42M, indicating strong asset backing.
  • Operating cash flow of (16.21M) provides strong 2.23x coverage of operating expenses (7.27M), showing operational efficiency.
  • Retained earnings of (232.27M) represent substantial 5.27x of equity (44.04M), indicating strong internal capital generation.
  • Cash reserves of 6.46M provide solid 1.66x coverage of other non-current liabilities 3.89M, indicating strong liquidity.
  • Free cash flow of (18.83M) provides solid 2.59x coverage of operating expenses (7.27M), showing operational efficiency.

Bear case

  • Operating cash flow of (16.21M) barely covers its investment activities of 7.38M, with a coverage ratio of -2.20, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 6.46M against inventory of 88.90M, the 0.07 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • The company's operating cash flow of (16.21M) shows concerning coverage of stock compensation expenses of 556000, with a -29.15 ratio indicating potential earnings quality issues.
  • Free cash flow of (18.83M) provides weak coverage of capital expenditures of 2.62M, with a -7.18 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (21.75M) show weak coverage of depreciation charges of 8.43M, with a -2.58 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Home Improvement Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 HD Home Depot, Inc. 424.87 Bn 37.92 3.86 65.42 Bn
2 LOW Lowes Companies Inc 282.71 Bn 110.69 5.11 44.70 Bn
3 FND Floor & Decor Holdings, Inc. 7.47 Bn 34.45 1.60 1.99 Bn
4 HVT Haverty Furniture Companies Inc 0.57 Bn 67.28 0.92 0.21 Bn
5 LIVE LIVE VENTURES Inc 0.06 Bn 2.60 0.13 0.22 Bn
6 TBHC Brand House Collective, Inc. 0.03 Bn -1.00 0.07 0.19 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.87 2.29
EV to Cash from Ops. EV/CFO -12.32 22.64
EV to Debt EV to Debt 1.03 3.80
EV to EBIT EV/EBIT -9.18 29.44
EV to EBITDA EV/EBITDA -14.64 17.00
EV to Free Cash Flow [EV/FCF] EV/FCF -10.60 92.96
EV to Market Cap EV to Market Cap 7.17 2.67
EV to Revenue EV/Rev 0.49 2.22
Price to Book Value [P/B] P/B -0.63 -55.76
Price to Earnings [P/E] P/E -1.00 41.99
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 0.86
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 34.62
Dividend per Basic Share Div per Share (Qtr) 0.00 2.52
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 25.87
Interest Coverage Int. cover (Qtr) -3.49 17.24
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 14.90 10.53
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -4.43 8.26
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -5.82
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -38.27 58.71
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -514.05 -15.87
EBIT Growth (1y) % EBIT 1y % (Qtr) -41.40 62.53
EBT Growth (1y) % EBT 1y % (Qtr) -36.17 24.00
EPS Growth (1y) % EPS 1y % (Qtr) 37.74 34.92
FCF Growth (1y) % FCF 1y % (Qtr) -35.40 -7.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -23.85 -1.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.79 1.34
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.15
Cash Ratio Cash Ratio (Qtr) 0.06 0.23
Current Ratio Curr Ratio (Qtr) 0.93 1.29
Debt to Equity Ratio Debt/Equity (Qtr) -4.38 0.10
Interest Cover Ratio Int Coverage (Qtr) -3.49 17.24
Times Interest Earned Times Interest Earned (Qtr) -3.49 17.24
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -3.30 9.97
EBIT Margin % EBIT Margin % (Qtr) -5.31 6.49
EBT Margin % EBT Margin % (Qtr) -6.83 5.16
Gross Margin % Gross Margin % (Qtr) 24.10 38.12
Net Profit Margin % Net Margin % (Qtr) -6.80 3.72