I tend to approach corporate recovery plans with the same caution I bring to a suspiciously inexpensive home renovation estimate. The finished version looks wonderful. The schedule is reassuring. Somewhere between the attractive rendering and the final invoice, however, reality usually requests a meeting. Charles River Laboratories has given investors an ambitious picture of its business in 2030, and I think the interesting question is what has to happen between here and there. My initial conclusion is that CRL has a credible recovery framework, but the earnings ambition cannot be explained by cutting costs alone. The revenue assumptions do substantial work. At the midpoint of management’s growth target, my simplified model produces roughly 9.4% annual adjusted operating-profit growth. With no revenue growth, the same endpoint margin produces only about 3.2%. That difference is where I would concentrate my research, rather than letting a large savings announcement do all the persuasion...
I can tell when a grocery bill has changed my mood. I start comparing unit prices with the intensity of a forensic accountant. I decide that every errand should happen on the same trip because gasoline has apparently become a luxury purchase. Then I walk into Costco for coffee and detergent and leave wondering whether I have enough room at home for forty-eight rolls of paper towels. That last part is funny until I look at Costco’s latest quarter. The company is benefiting from the same pressure that has households planning their shopping more carefully. Its fourth-quarter revenue rose about 11% to $95.72 billion, ahead of the $94.86 billion analysts expected. Comparable sales, excluding gasoline and currency effects, increased 6.7%, beating the 6.11% estimate. Costco also reported adjusted earnings of $6.60 a share after removing a one-time, 15-cent benefit from tariff refunds, compared with expectations of $6.53. Reuters Those numbers tell me Costco had a strong quarter. The more inte...