What is Same-store sales?

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Same-store sales

Define

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Same-store sales Same-store sales in English.

Same-store sales refers to the sales generated by a retail location in the most recent accounting period compared to the sales it generated during a similar period in the past.

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Same-store sales aka comparable sales (English: Comparable Store Sales or “comps”).

Meaning

– Same-store sales is a financial metric that companies in the retail industry frequently use to gauge the growth in total revenue generated by the company's established stores over a certain period of time (usually a quarter, a year, or a quarter). or longer) than similar figures for the same time period in the past.

– Investors and analysts evaluate a retail company's financial statements based on same-store sales to provide an overview of how established stores have performed over time compared to the performance of new stores.

In fact, same-store sales are a measure of a company's internal sales growth (internal growth).

– For chains that are growing rapidly and opening new stores, same-store sales metrics allow analysts to distinguish between sales growth that comes from new stores and growth from operations improved at existing stores.

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– Same-store sales most commonly used during the holiday shopping season of the year closest to the previous year. It can also be used to compare sales this week, this month, this quarter, or this year with the sales of last week, last month, last quarter, or the previous year.

Eg

A retail company's report for a second quarter of 2018 shows sales for that quarter of $18 million. However, this information will be useless if it is used independently. To understand this number, an analyst would compare the $18 million figure with sales generated in the preceding quarter of the same accounting year (first quarter of 2018) or the preceding accounting year (first quarter of 2018). II in 2017).

If same-store sales increase compared to the previous period, which is a sign that the retail company is on the right track. Increase same-store sales It is explained that the retailer that has been successful in retaining its customers can focus more on its existing chain stores and worry less about expansion.

Opposite, if same store sales A negative number that persists for several quarters or even years can be a sign that a retailer is in trouble.

(Reference: Investopedia)