Liquor Profits

It is no secret that Repeal has been something very close to a flop as a business proposition. Publication of Government liquor tax receipts for fiscal 1934 merely added to the evidence. Liquor retailing has been bitterly competitive and for small stores practically profitless. Big distributors are sagging under the weight of carrying the corner dealer. Even the distillers, always suspect, have found Repeal no gold mine. Few weeks ago National Distillers, stockmarket comet of 1933, hit a new low for the year on the same day that Coca-Cola hit a new high of $136 per share.

Last week National Distillers reported profits of $5,700,000 for the first half, equal to $2.87 per share. But $3,800,000 of this was made in the first quarter when whiskey in a window was still a novelty, only $1,900,000 in the second quarter after people had learned that even whiskey in a window could be pretty bad. Ten times annual earnings per share is an old thumb rule for stock prices but so unpromising did investors rate the liquor outlook last week that National Distillers stock at $17 per share was selling at six times half-year earnings or three times earnings on an annual basis.

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