1992-02-28 Warren Buffett.See’s Candy

Refer To：《1992-02-28 Warren Buffett's Letters to Berkshire Shareholders》。

Twenty Years in a Candy Store

糖果店里的二十年

We’ve just passed a milestone: Twenty years ago, on January 3, 1972, Blue Chip Stamps (then an affiliate of Berkshire and later merged into it) bought control of See’s Candy Shops, a West Coast manufacturer and retailer of boxed-chocolates. The nominal price that the sellers were asking—calculated on the 100% ownership we ultimately attained—was $40 million. But the company had $10 million of excess cash, and therefore the true offering price was $30 million. Charlie and I, not yet fully appreciative of the value of an economic franchise, looked at the company’s mere $7 million of tangible net worth and said $25 million was as high as we would go (and we meant it). Fortunately, the sellers accepted our offer.

我们刚刚跨过一个里程碑：20年前的1972年1月3日，Blue Chip Stamps（当时是Berkshire的关联公司，后来并入Berkshire）买下了 See’s Candy Shops 的控股权——这是一家位于西海岸、生产并零售盒装巧克力的企业。卖方提出的名义价格——按我们最终获得的100%股权计算——是4,000万美元。但公司账上有1,000万美元的多余现金，因此真实的要约价格是3,000万美元。Charlie 和我当时还没有充分理解“经济特许经营”的价值，只盯着公司区区700万美元的有形净资产，于是说我们最多只能出到2,500万美元（而且我们是认真的）。幸运的是，卖方接受了我们的报价。

The sales of trading stamps by Blue Chip thereafter declined from $102.5 million in 1972 to $1.2 million in 1991. But See’s candy sales in the same period increased from $29 million to $196 million. Moreover, profits at See’s grew even faster than sales, from $4.2 million pre-tax in 1972 to $42.4 million last year.

此后，Blue Chip 的交易印花（trading stamps）销售额从1972年的1.025亿美元下降到1991年的120万美元。但在同一时期，See’s 的糖果销售额却从2,900万美元增长到1.96亿美元。更重要的是，See’s 的利润增长速度甚至快于销售额：从1972年税前420万美元增长到去年的4,240万美元。

For an increase in profits to be evaluated properly, it must be compared with the incremental capital investment required to produce it. On this score, See’s has been astounding: The company now operates comfortably with only $25 million of net worth, which means that our beginning base of $7 million has had to be supplemented by only $18 million of reinvested earnings. Meanwhile, See’s remaining pre-tax profits of $410 million were distributed to Blue Chip/Berkshire during the 20 years for these companies to deploy (after payment of taxes) in whatever way made most sense.

要正确评估利润的增长，必须把它与为实现这份增长所需要的“增量资本投入”进行对照。从这个角度看，See’s 的表现堪称惊人：公司如今只需2,500万美元的净资产就能从容运转，这意味着我们最初的700万美元基础，只需要再补充1,800万美元的再投资收益即可。与此同时，See’s 在这20年里剩余的税前利润4.10亿美元，都以分红方式分配给了 Blue Chip/Berkshire，让这两家公司在缴税之后可以把资金投向任何最合算的用途。

In our See’s purchase, Charlie and I had one important insight: We saw that the business had untapped pricing power. Otherwise, we were lucky twice over. First, the transaction was not derailed by our dumb insistence on a $25 million price. Second, we found Chuck Huggins, then See’s executive vice-president, whom we instantly put in charge. Both our business and personal experiences with Chuck have been outstanding. One example: When the purchase was made, we shook hands with Chuck on a compensation arrangement—conceived in about five minutes and never reduced to a written contract—that remains unchanged to this day.

在收购 See’s 这笔交易中，Charlie 和我有一个重要洞见：我们看到了这门生意尚未充分释放的“提价能力”。除此之外，我们还两次走运。第一，交易没有因为我们愚蠢地坚持2,500万美元价格而被搅黄。第二，我们找到了当时担任 See’s 执行副总裁的 Chuck Huggins，并立刻让他负责全局。我们在业务与个人层面与 Chuck 的相处都非常出色。举一个例子：收购完成时，我们与 Chuck 仅靠握手就敲定了一个薪酬安排——大约五分钟想出来、从未写成合同——直到今天仍一字不改、原封不动。

In 1991, See’s sales volume, measured in dollars, matched that of 1990. In pounds, however, volume was down 4%. All of that slippage took place in the last two months of the year, a period that normally produces more than 80% of annual profits. Despite the weakness in sales, profits last year grew 7%, and our pre-tax profit margin was a record 21.6%.

1991年，See’s 的销售额（按美元计）与1990年持平；但按磅数计算，销量下降了4%。所有下滑都发生在年末两个月——而这段时期通常贡献全年利润的80%以上。尽管销售疲弱，去年的利润仍增长了7%，税前利润率更是创下21.6%的纪录。

相比销量，提价是更重要的能力，过去20年，销量增长了6.76倍；利润增长了10.10倍，不能提价或者提价能力不够还想获得增长只有一个办法：抢占别人的市场份额，结果就是竞争。

Almost 80% of See’s sales come from California and our business clearly was hurt by the recession, which hit the state with particular force late in the year. Another negative, however, was the mid-year initiation in California of a sales tax of 7%-8% (depending on the county involved) on “snack food” that was deemed applicable to our candy.

See’s 近80%的销售来自 California，而我们的生意显然受到了经济衰退的冲击——这次衰退在年末对该州打击尤为严重。不过还有一个不利因素：California 在年中开始对被认定为适用于糖果的“snack food”征收7%—8%的销售税（具体税率取决于所在县）。

Shareholders who are students of epistemological shadings will enjoy California’s classifications of “snack” and “non-snack” foods:

热衷于研究“认识论微妙差别”的股东，会喜欢 California 对“snack”和“non-snack”食品的分类：

What—you are sure to ask—is the tax status of a melted Milky Way ice cream bar? In that androgynous form, does it more resemble an ice cream bar or a candy bar that has been left in the sun? It’s no wonder that Brad Sherman, Chairman of California’s State Board of Equalization, who opposed the snack food bill but must now administer it, has said: “I came to this job as a specialist in tax law. Now I find my constituents should have elected Julia Child.”

你们一定会问：一根融化了的 Milky Way 冰淇淋棒，该按什么税目征税？在那种“雌雄同体”的形态下，它更像一根冰淇淋棒，还是更像一根被太阳晒化了的糖棒？难怪 California 的 State Board of Equalization 主席 Brad Sherman（他当初反对这项“snack food”法案，但如今必须负责执行）会说：“我来做这份工作时，是个税法专家。现在我发现，我的选民当初该选 Julia Child 才对。”

Charlie and I have many reasons to be thankful for our association with Chuck and See’s. The obvious ones are that we’ve earned exceptional returns and had a good time in the process. Equally important, ownership of See’s has taught us much about the evaluation of franchises. We’ve made significant money in certain common stocks because of the lessons we learned at See’s.

Charlie 和我有很多理由为能与 Chuck 和 See’s 结缘而心怀感激。显而易见的理由是：我们获得了非同寻常的回报，而且整个过程也很愉快。同样重要的是，拥有 See’s 的经历让我们在评估“特许经营”方面学到了很多。正因为从 See’s 学到的这些教训，我们在某些普通股上赚到了相当可观的钱。

1992-02-28 Warren Buffett.See’s Candy

1992-02-28 Warren Buffett.See’s Candy

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