If it's all the same to you...

Posted: March 07, 2013

Q: WHAT ARE "same-store sales" numbers?

- G.R., Flagstaff, Ariz.

A: They reflect sales at stores open a year or more. Imagine that Wanton Punctuation (ticker: ?#$@!) reports sales of $300 million in 2011 and $600 million in 2012. That looks great - 100 percent growth!

But now assume that Wanton had 10 stores open in 2011 and 20 open in 2012. If its same-store sales for 2012 came in at $300 million, then sales at its stores open for at least a year have not come close to doubling.

If you boost your number of stores, then of course your total sales will probably rise. Some retailers might open many new units, but their average sales per store might be flat or falling.

Same-store numbers (also called "comps") can help you see the situation more clearly, comparing apples to apples. Expansion can be good, but companies should be increasing sales at their existing stores, too.

|
|
|
|
|