Same-store sales are important to retailers, but many investors are worried that 2021 (a great year for the industry) will give them a big boost and will fall in 2022. Analysts last month.
Definitions vary from company to company, but same-store sales, or equivalent sales, typically measure changes in revenue for stores that have been open for more than a year. This is useful for showing the performance of existing stores. A company’s sales can increase. Even if you add a new store, the expansion may not be positive if the customer does not return over time.
Concerns about customers’ willingness to spend are growing today, and many investors are concerned that retailers will struggle to keep up with the significant increase in sales achieved during a pandemic. It’s been argued that people will be able to go to restaurants and watch live entertainment, so they’ll spend less money on shopping.
In addition, last month brought a lot of major news. Not only are there big retailers across the spectrum where significant vacation quarter results were reported, but gasoline prices have skyrocketed since Russia’s invasion of Ukraine, putting pressure on consumer purchasing power during inflation already 10 This is the highest price in a year.
So it’s no surprise that analysts average low estimates of same-store sales for the full year.
As of Thursday, growth had fallen from 16.5% last month to 5.1%.
Five companies went against this trend.Analysts Estimate Annual Same-Store Sales
(AZO), Advance Auto Parts (AAP), and
(ORLY) It has been rising in the past month.
|Company / Ticker||Recent prices||Latest SSS quote|
|Dollar Tree / DLTR||$ 157.17||4.00%|
|Dollar General / DG||229.63||2.50|
|AutoZone / AZO||1,952.75||6.50|
|Advance Auto Parts / AAP||206.34||2.00|
|O’Reilly Automotive / ORLY||689.98||5.70|
Note: Forecasts are year-round.
Discount stores have seen the biggest improvement. Analysts are more optimistic about Dollar Tree, given that the company is renewing its board of directors in response to pressure from activist investors. At least two analysts have upgraded their Dollar Tree rating in the news. The consensus is now looking for sales in the same store to rise 4% from previous 1% growth estimates.
In any case, consumers tend to trade down to discounters while pinching a penny, and the outlook was bright when Dollar General (DG) reported good results in the fourth quarter this week. Store sales increased 2.5%, compared to previously expected to decline.
Analysts have also tweaked comparable sales estimates for three auto parts retailers, all of which are expected to achieve same-store sales growth this year.
This may seem counter-intuitive, given that rising gas prices reduce people’s driving and car wear. The group’s most recent quarterly results have been quite strong.
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