By Abbey Lewis
CHICAGO - Privately owned family companies and public chains alike convened at the NACS State of the Industry Summit yesterday to inundate themselves with data €" to immerse themselves in the metrics. But as discussed in the "Finance: Growing Shareholder Value Using Financial Metrics" educational session, no two numbers are alike, and each c-store uses a different metric to determine shareholder value.
As no two numbers are alike, neither are the stores. The room at the conference hall was filled with private and public entities €" family owned outfits with three generations of leadership under the same last name, and growing chains with quarterly public reporting obligations. Jon Stewart, president and CEO of Tristar Marketing Inc., a family-run business with 54 stores in Illinois and Indiana, said that they are constantly benchmarking themselves.
"We€™re fairly regimented [in our reporting] for a privately owned company," he said. "But it€™s worked for us."
On the opposite end of the spectrum, Rocky Dewbre, president and COO of wholesale for Stripes LLC, talked about their "extensive business planning process," necessary no doubt because of quarterly reporting necessary for a public company such as theirs.
The conversation among retailers took an interesting turn when Jeff Miller, president of Miller Oil Co. Inc. and 2010-11 NACS chairman, asked which benchmarking metric was the most vital during an audience Q&A.
- Rachel Andreasson, executive vice president of marketing for Wallis Companies, said for them it was easily EBITDA.
- For Stewart, it€™s a determination of the return on equity on an annual basis, which they track quarterly.
- Multiple other retailers in attendance agreed that they look to terminal value to help determine shareholder value.
No matter how compelling the numbers can be, it€™s often not enough when families are involved. Miller asked panelist Stewart how effectively he translates the value of their company and assets to a board membership made up of family. "If they have smiles," Stewart said, "then we€™ve been OK."