Companies that are trading at or near tangible book value per share are considered to be a good value. Delivered twice a week, straight to your inbox. Same-store-sales data reveals how a store, or a number of stores, fares on a period-to-period basis.
But the good news is that if an investor knows what metrics to look forthe stock selection process will be much easier.
It may also suggest that Walmart has a better merchandise mix, and may have more flexibility with respect to its margins, though other factors would have to be examined to determine whether this is the case.
Ideally, an investor would like to see both sequential and year-over-year same-store-sales growth. Visit the Stores An investor can learn a lot simply by perusing the aisles of a particular retail location. Using this data point alone, Sears would have been considered the "cheaper" stock.
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As a result of its narrow geographic footprint, its company-wide sales took a big hit, as a number of its locations were either closed or made inaccessible by construction.
This may lead to a deceleration in sales in some future period. Analyze Promotional Activities Is the company promoting its merchandise to drive foot traffic or earnings? Visiting the store, and examining the weekly circulars, can give the investor an idea of whether the company is begging shoppers, literally or figuratively, to come into the store, which can be a sign that the company is headed toward an earnings shortfall.
The resulting number should then be divided by the total number of outstanding shares. Then the September 11 terrorist attacks occurred. If receivables are growing at a faster rate than revenues, it may indicate that the company is not getting paid on a timely basis. Examine the Geographic Footprint If an investor is comparing two companies that are otherwise identical, the investor should select the one for investment with the most diversified revenue base and store locations.
In short, changes in the inventory and receivable accounts should garner a great deal of attentionbecause they can often signal future fluctuations in revenue and earnings. Consider the case of Duane Reade, which in became a subsidiary of the Walgreen Company.
However, investors should also keep seasonality effects in mind. Conversely, if same-store-sales numbers are decelerating, it may signify that a host of problems exist, such as increased competition, a poor merchandise mix or a number of other factors that could be limiting foot traffic.
The Bottom Line To analyze retail stocks, investors need to be aware of the most common metrics used, as well as the company-specific and macroeconomic factors that can have an impact on the underlying stock prices.Our market-leading Digital Pulse newsletter is an invaluable source for digital and ecommerce analysis, inspiration and learning.
I think we have seen the resurgence of the concept store. In fact, I think retail has woken up to the value of service, great product display, interactivity, digital technology and a great shopping experience.
It's a growing trend in retail, and Supervalu says it will be "unlike anything you'll see in any Cub." urban concept grocery store in unit complex being built by Excelsior-based.
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Excelsior Milano is a seven-floor concept store brought to you by Italian retailer Gruppo Coin and French starchitect Jean Nouvel. retail analytics, consumer insights and bespoke consultancy services. Excelsior Milano concept store by Jean Nouvel, Milan. retail design blog.
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