What happened after Buffett bought NFM?

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First, Mrs B, Chairman of the Board had no intention of retiring for a long time yet, and Buffett had no intention of asking her to do so.  Her salary was raised and she worked her customary 7 days a week selling carpet. She was quoted in the local paper as saying, “I come home to eat and sleep, and that’s about it.  I can’t wait until it gets daylight so I can get back to the business”.

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When Buffett and Munger buy a business they look for people who don’t lose an ounce of passion for running it even after someone else owns most or all the shares. They certainly struck lucky on that score with NFM because Louie, Ron, Irv, Steve and other grandchildren of Mrs B had a great passion for the business and showed no inclination to pull back on effort.  They were excited about the potential to do great things with the business.  Looking at the numbers in the table below I think we can conclude that they did well.  In the ten years after purchase revenue doubled, as did profits.  Most of the cash thrown off was available for Buffett to invest elsewhere.

Berkshire’s share of Nebraska Furniture Mart’s earnings after tax and sales

Earnings after tax $m Sales $m
1983 (4 months only) 4.5 annualised 100
1984 5.9 115
1985 5.2 120
1986 7.2 132
1987 7.6 143
1988 9.1 n/a
1989 8.4 153
1990 8.5 159
1991 7.0 n/a
1992 8.1 n/a
1993 10.4 200
2011 “Earnings record in 2011, netting more than ten times what it did in 1983”

After 1993 the publicly available data gets sketchy.  As Berkshire Hathaway bought more retailers its annual report showed the revenue and profit numbers of NFM lumped in with a number of other companies.  Thus, I’m unable to show the profit growth thereafter. However, Buffett did say that in 2011 NFM’s earnings were more than ten times what they were in 1983.

And we could do a little inferring:  after opening the store in Des Moines (1993), the one in Kansas City (2003) and the store in Texas (2016) NFM revenue rose to around $1.6bn.  From

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