In our Dec. 6 edition of MarketFoolery, Rich Greifner sheds some light on a common metric that investors use when evaluating retailers: same-store-sales. Rich likes the metric but thinks it can be misleading.
Instead, he suggests looking at the breakdown of newer locations compared with older ones. That's important, because some high-growth retailers such as Chipotle (NYSE: CMG) or Ulta Salon (Nasdaq: ULTA) may look expensive when evaluating their same-store-sales in aggregate, but when you break it out differently, you can more easily see how they'll continue to put up big growth numbers.
Chris Hill and Joe Magyer have no positions in the stocks mentioned above. Rich Greifner owns shares of Lumber Liquidators. The Motley Fool owns shares of Chipotle Mexican Grill, Lumber Liquidators, and Ulta Salon. Motley Fool newsletter services recommend Chipotle Mexican Grill, Lumber Liquidators, and Ulta Salon. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.