The Numbers Retail Doesn't Want You to Know

Once a month, many retailers report their monthly same-store sales and net sales data. Unfortunately, investors may now have to wait a lot longer to get an idea of how their retail stocks' businesses are faring. Teen retailers Aeropostale (NYSE: ARO  ) , Abercrombie & Fitch (NYSE: ANF  ) , and American Eagle Outfitters (NYSE: AEO  ) have all stopped reporting their same-store sales figures on a monthly basis.

Same-store sales, or comparable-store sales, reveal sales growth (or lack thereof) for stores that have been open for more than a year. They can help investors discover how a retailer's currently faring in its drive to attract customer traffic, hint at broader retail trends, and provide illuminating comparisons to previous sales figures.

The monthly report can be a fairly silly day for retail stocks, since they often react in highly dramatic (if not downright nonsensical) ways to those short-term metrics. Unfortunately, as a result, there may be a growing tendency for retailers to simply avoid the monthly disclosure altogether.

These teen retailers aren't alone in curtailing their disclosures. They join a rather large crowd of retailers that wants out of the monthly comps fray. Five years ago, Thomson Reuters tracked monthly data from 68 retailers; now, that number's a mere 25.

Back in 2006, Starbucks (Nasdaq: SBUX  ) decided to stop disclosing its comps on a monthly basis. It was following retailers like Wal-Mart (NYSE: WMT  ) and Talbots (NYSE: TLB  ) , which had changed to quarterly same-store sales disclosures instead.

I doubt many Foolish investors agree that less is more where investing data's concerned. Although retail stocks do become volatile on that fitful disclosure D-Day (the first Thursday of every month), true long-term investors know that one month's worth of data is only one piece of a lot of information that should be weighed before making a buy or sell decision.

The dwindling number of retail chains that still report the figure on a monthly basis isn't good news for investors. Now more than ever, we need more transparency and pertinent information in the marketplace, not less.

What do you think? Sound off in the comments box below.

Wal-Mart is a Motley Fool Inside Value selection. Starbucks is a Motley Fool Stock Advisor recommendation. Wal-Mart is a Motley Fool Global Gains pick. The Fool owns shares of Aeropostale, and Wal-Mart. Try any of our Foolish newsletter services free for 30 days.

Alyce Lomax owns shares of Starbucks. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1437779, ~/Articles/ArticleHandler.aspx, 12/22/2014 6:29:29 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement