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WIKI ANALYSIS| This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition. |
Same store sales are sales revenues of retail stores that have been open for a year or more. Most retail companies report this metric monthly. Same store sales is also called “comps.”
New sales come from two sources:
- Sales growth
- Opening new stores
The monthly same store sales number reveals what portion of new sales comes from sales growth in existing stores and excludes sales from opening new stores.
Analysts and investors prefer rising same store sales each month as this indicates that compared to the prior month
- Store traffic is increasing and/or
- Shoppers are willing to pay more for products
These two factors increase sales revenues without opening new stores, which is often a more capital-intensive way of growing.
A typical same-store-sales headline you might read is, "Target slashed its forecast for September same store sales citing weaker-than-expected traffic, prompting some investors to sell shares and analysts to reduce forecasts for the discount retailer."
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