Ndic Consumer Division

CONSUMER HOLDINGS

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SECTOR OVERVIEW

Gap Inc. (GPS)

GPS current trading price - November 4, 2004 - approx. 22.37

Gap Inc. Overview

Gap is an International specialty retailer selling casual apparel, personal care items, and other accessories for men, women, and children, celebrating its 35th anniversary in 2004.

Fiscal 2003 Revenue of $15.9 billion October 2004: Comparable store sales grew 3%, as net revenue for

the month increased 5%, compared to a year ago

Controls various affiliates that target different consumer interests with diverse marketing styles: The Gap, Gapkids, babyGap, Banana Republic, and Old Navy.

As of October 22, 2004, Operates 3,038 stores in the United States, the United Kingdom, Canada, France, and Japan.

Competitor Comparisons

Major Competitors:

American Eagle Outfitters

Abercrombie & Fitch

SWOT Analysis

Strengths Diversity under different

brands Appealing to all ages and

genders and providing products in all price ranges

Brand recognition and effective advertising…2004 “How Do You Wear It?” campaign and tour

New private label credit card awarding customers at Gap, Old Navy, and Banana Republic

Weaknesses

Heavily influenced by consumer spending and current economic state of the nation

Gap must be able to compete with its competitor in the market for teen apparel

SWOT Analysis

Opportunities Gap and Old Navy maternity and

Old Navy plus-size lines Appeal to Internet shoppers with

new credit card and special offers

Development of an entire new line for women over 35 years old

Former Oscar de La Renta VP of design and senior designer of J Crew will oversee product design

Ten stores in two markets will open in Fall 2005

Threats Gap continues transitions with

new management and designers American Eagle continues to

report increased sales Gap CEO, Paul Pressler, could

potentially return to Disney New set of competitors with the

new brand Stability of international

operations

Future Outlook Stock re-purchase program is up to $750 million

Continue “pop culture” marketing campaign with various entertainment stars

Focus on inventory management

Likely to be more management changes

Keep an eye on development and success of new line

PepsiCo, Inc (PEP)

PepsiCo, Inc Overview

PepsiCo, Inc. is a global snack and beverage company. The Company manufactures, markets and sells a variety of salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages and foods.

It is organized in four divisions: Frito-Lay North America, PepsiCo Beverages North America, PepsiCo International and Quaker Foods North America.

Its North American divisions operate in the United States and Canada. Its international divisions operate in nearly 200 countries, with its largest operations in Mexico and the United Kingdom.

Competitor Comparison

SWOT Analysis

Strengths Strong brand name

(Number 2 in industry)

Strong international market

Rising earnings in 2004

Weaknesses People are

questioning its water purification process

Health craze may lower consumption of products

SWOT Analysis

Opportunity Changed name of Diet

Sierra Mist to Sierra Mist Free

Growing international market after Coca-Cola’s European anti-trust settlement

Threats Relationship with

Advertising Agency is in jeopardy

NHL Lockout means lack of exposure for Pepsi Center in Denver

Future Outlook

Growing international market should bring on greater sales

May need to focus on healthier products

Expecting increase earnings and growth in 2004 of 13-15%.

Johnson & Johnson (JNJ)

GRAPH

JNJ Overview

Johnson & Johnson is engaged in the manufacture and sale of products related to human health and well-being.

Over 200 operating companies worldwide.

The Company's business is divided into three segments: Consumer, Pharmaceutical and Medical Devices and Diagnostics.

Consumer segment: baby and child care, skin care, oral and wound care and women's healthcare fields, as well as nutritional and over-the-counter pharmaceutical products.

Pharmaceutical segment: antifungal, anti-infective, cardiovascular, dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain management, psychotropic and urology fields.

Medical Devices and Diagnostics segment: products used by or under the direction of physicians, nurses, therapists, hospitals, diagnostic laboratories and clinics.

SWOT Analysis

STRENGTHS Surpass industry averages in

sales and income JNJ: 45,850.0 mil vs.

15,012.1 mil JNJ: 9,137.0 mil vs. 2,747.3

mil For the nine months revenues

rose 13% to $34.6 billion: Revenues reflect a strong

performance of RISPERDAL, LEVAQUIN, and TOPAMAX

36.30% one-year income growth

WEAKNESSES Patients taking JNJ’s arthritis

drug Remicade may have higher risk of lymphoma

Relative price strength decreasing

P/E to growth ratio suggests stock may be overvalued

SWOT Analysis

OPPORTUNITIES Most pharmaceutical stocks

rose as a Bush victory is seen as reducing the threat of government-imposed price cuts on drug companies & the threat of drug imports

FDA approved a JNJ company’s CHARITE artificial disc to treat severe low back pain

Viactiv introduced new Vitamin Chews in new flavors

THREATS PG has been very successful

(billion dollar sales) in China market

Negative financing cash flow

Wal-Mart, Inc. (WMT)

Wal-Mart Stores, Inc. Overview

Wal-Mart Stores, Inc. operates discount stores and Supercenters, as well as Sam's Clubs. The Company's Wal-Mart discount stores and Supercenters offer merchandise such as apparel, housewares, small appliances, electronics, and hardware.

The products are categorized into grocery, candy and tobacco; hardgoods; soft goods-domestics; pharmaceuticals; electronics; sporting goods and toys; health and beauty aids; stationery; one-hour photo; jewelry; apparel and shoes.

In the United States Wal-Mart operates 1478 discount stores, over 1,471 Supercenters, 538 SAM's CLUBs and 64 Neighborhood Markets. It also operates 1,400 units internationally.

The company operates in the United States, the United Kingdom, Argentina, Brazil, Canada, China, Germany, South Korea, Mexico and Puerto Rico.

Competitor Comparisons

SWOT Analysis

Strengths Gross margins stronger in 3rd Qtr.,

changed tax rate pushed earning to "high end" of per-share forecast range of 52 cents to 54 cents

Foods division producing steady profits, becoming even greater threat to supermarkets

Steady international expansion and sales abroadFor October, total sales increased 10.4 % For

the quarter, sales rose 11.4%

SWOT Analysis

Weaknesses Sales at stores open longer than a year rose only 2.8

percent lower end of an earlier forecast of 2 percent to 4 percent

Senior management dedicating too much time to legal and publicity issues, hurting WMT’s focus

Focusing on price points: quantity rather than quality Targeting low-end customers Losing high income shoppers

Disturbing trend in non-food/general merchandise Only exceeded 2% growth sales in one quarter since 3rd

Qtr. ’02

SWOT Analysis

Opportunities Food market is strong Higher consumer spending

post-election Worst is behind us attitude Stocked price target around

$64 Increased holiday sales Wal-Mart International:

continued growth Beginning to focus on quality

Threats Target:

Capturing high income customers

Focusing on quality with more high-end products

Gap between companies increasing

Employee health care issues Retail stocks risen without

WMT about 11% since August, while WMT has done nothing

Future Outlook

Analysts believe that WMT’s next move is up.

Company is beginning to focus on quality to better compete with Target.

Positive impact of increasing consumer spending.

Continuous improvements in stores.

PROPOSAL: BUY Wm. WRIGLEY Jr. Company (WWY)

World’s #1 maker of chewing gum. World famous brands marketed in over 180 countries.

Manufactures & markets chewing gum and other confectionary products.

Factories: 4 in U.S. and 11 abroad Subsidiary: Amurol Confections--maker of novelty

gums and candies, such as Bubble Tape, Everest, Squeeze Pop and Velamints.

2 Domestically wholly owned associated companies: L.A. Dreyfus Company (gum base) & Northwestern Flavors, LLC (processes flavorings and rectifies mint oil)--both manufacture products other than chewing gum.

Chairman & CEO Bill Wrigley Jr. represents 4th generation of company’s helm.

Products

Taste: Juicy Fruit Spearmint Doublemint Extra

Oral Care: Orbit White Orbit Freedent

Breath-Freshening: Winterfresh Big Red Eclipse Eclipse Flash

Wellness: Airwaves Alpine

Recent News/ Past Performance

CHICAGO, Oct. 26: WWY announced today double-digit volume, sales and earnings growth for the third quarter and the nine months ended September 30, 2004. Earnings per share of $0.56 for the quarter and $1.67 through nine months were up 12% from the year-ago periods on global sales growth of 17% for the quarter and 20% year to date.

Sales increases were driven by worldwide shipment growth of

13% in the quarter and 14% through nine months.

Volume gains reflect solid performance of WWY & impact of Joyco Acquisition.

More International Expansion- Oct 21, 2004: Close down plant made fresh breath film in AZ and move it to Poland because revenue from the breath film in Europe is increasing.

International- Joyco Acquisition

Last April 2004: WWY acquired confectionery businesses of the Joyco Group from Agrolimen, a privately held Spanish conglomerate. Key additions to the Wrigley Company's portfolio of brands

will include Boomer bubble gum, Pim Pom lollipops, and Solano candy.

Wrigley will also acquire major sales and production operations in China, India and Spain, smaller commercial operations in France, Italy and Poland, as well as Cafosa, Joyco's gum base business.

Recent Performance

Sales for the quarter in North America up 6%- driven by volume growth and positive mix.

U.S.- Orbit and Eclipse were key contributors to sales Wrigley’s EMEAI Region (particularly Europe) sales

were up 25% on strong volume growth. Asia: Sales up 23% Consolidated operating profits in quarter grew by 10%,

reflecting sales increases in all regions and positive impact of currency (somewhat offset by increased investment in brand support, selling infrastructure, IT, R & D as well as costs of Joyco acquisition.)

Recent News

Dividends Declaration: Oct 26: Wrigley Company declared a regular dividend of $0.235 on

each share of Common Stock three-month period beginning February 1, 2005.

Stock Repurchase: Aug 18, 2004: Board of Directors authorized future stock repurchases of up to $300 million.

This new repurchase program will follow the completion of the Share Repurchase Program authorized by the Board in January of this year, under which $60 million remains available for repurchase of company stock.

“The authorization underscores the continued confidence the Board of Directors has in the Company's financial strength and long term business prospects," said Bill Wrigley, Jr., Chairman of the Board, President and CEO.

KEY STATISTICS

Market Cap (b) 15.169

P/E Ratio 32.05

EPS 2.11

Earnings Growth 11.10%

ROE 26.28%

ROA 18.73%

Profit Margin 14.02%

Beta .123

Operating Margin 20.53%

Shares Out (mil) 224.76

52-week high 67.90

52-week low 54.44

% Held by Insiders 26.85%

Dividends .94

Price/Book 7.83%

Change Rel S&P 9.12%

OCF (mil) 744.60

Competitor Comparison

WWY TOPP Industry

(food processing)

Market Cap: 15.17B 415.07M 181.88M

Rev. Growth 11.80% 2.50% 6.50%

Revenue 3.37B 304.90M 315.64M

Gross Margin 57.39% 35.13% 26.44%

Operating Margins 20.53% 4.30% 5.78%

Net Income 473.13M 11.66M 7.14M

EPS 2.106 .281 .48

PE 32.05 36.55 18.92

SWOT Analysis

Strengths: With acquisition of Joyco, WWY

expands to new foreign markets and increases product mix.

Exceeded estimated EPS two consecutive quarters

Increasing product mix with research and innovation

For the nine months ended 9/30/04, revenues rose 20% to $2.69 billion. Net income rose 12% to $376 million. Revenues reflect higher Russia, China and U.S. shipments and improved product mix. Net income was partially offset by higher expenses for increased research.

Not much competition

Weaknesses:

New products? Aside from flavors may not be much technological improvements in the gum business.

SWOT Analysis

Opportunities: International Expansions

with Joyco acquisition (Global revenue up 17% in just one year.)

New brand developments

Threats: Competition from

companies with other big name products in addition to gum.

Ex: Hershey’s makes Bubble Yum & Cadbury Adams makes Bubblicious.

Only company solely manufactures gum products/ breath strips.

Future Outlook

Solid company with increasing revenue and net income

Growth potential internationally

Innovations- increased research spending; continue to update product mix

Analyst Recommendations: Analysts estimate growth of 10.8% over the next 5 years as compared to an industry growth of only 8.43%.

Questions?

Ndic Consumer Division

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