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Calloway's Nursery

CLWY
43
Home Improvement · Consumer Cyclical
Price
$5.51
+3.46 (+168.78%)
Market Cap
$42.1M
Winston Score
43
Winston is serious
Mixed quality — meaningful strengths and weaknesses.

Share count rising — dilution

+4.5% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 7.3M (2018) → 7.7M (2022)

Calloway's Nursery is a retail garden center chain that sells plants, trees, shrubs, flowers, and gardening supplies directly to everyday consumers. The company operates stores primarily in Texas, targeting home gardeners and landscaping enthusiasts who want locally adapted plants and expert advice. It is a regional specialty retailer, not a national chain, which shapes nearly everything about how it competes.

The company makes money by selling plants and related products directly in its stores, with no significant subscription or licensing revenue. Its geographic focus is tight — most locations are in the Dallas-Fort Worth and Houston metro areas — giving it deep knowledge of Texas growing conditions that big-box competitors like Home Depot and Lowe's struggle to match. That local expertise and curated plant selection is its main competitive edge, but its small size and regional concentration also mean any prolonged drought, economic slowdown, or housing market weakness in Texas could meaningfully hurt sales.

Winston Score History

Score breakdown

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Quality

Gross Margin
52.2%
Healthy — 52.2% gross margin
Operating Margin
11.5%
Modest — 11.5% operating margin
ROCE
7.2%
Weak — 7.2% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY
-7.8%
Shrinking sales (-7.8% YoY)
EPS YoY
-58.6%
Earnings shrinking (-58.6% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency
0/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion
177%
Turns 177% of profit into real cash
FCF Margin
9.4%
Modest free cash flow (9.4%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity
0.24
Conservative — low debt load (0.24)
Interest Cover
6.10x
Adequate interest coverage (6.1x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)
7.8x
Attractive valuation — P/E 7.8

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward
N/A
not available
Data not available

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Dividends

Not applicable for this business.
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