The Scoop on Same-Store Sales
Same-store sales are a measure of how well a particular retail chain is doing by looking at revenues versus the prior year. Also called comparable-store sales (or simply abbreviated comp. store sales), they measure the percentage change in revenues for stores that have been open for more than one year.
Same-store sales numbers are reported voluntarily by retail companies, which explains why all retail stores do not release them. The numbers are interpreted relative to the results of a company's competition as well as in relation to the general trend for that specific corporation. The numbers are often viewed as a sign of the company's general health, although some view this claim with a grain of salt since revenues can be pumped up by sales during the month. Marked-down goods increase sales numbers but do not increase profits.
An example: XYZ Corp. had 30 stores open last year that had $50 million for the month of March. This year, XYZ Corp. has 32 stores with total sales of $55 million for the same month. The two new stores each had $1.0 million in sales, meaning that the 30 stores open for more than one year had sales increase to $53 million ($55 million minus $2 million for the two new stores.
Same-stores sales are: $53 million/$50 million = 1.06 = +6.0%.