Comps Lesson

Best Buy has just reported a 6.5% reduction in comparable store sales for Fiscal December 2008 [which ended on 3rd January 2009]. Comps, Same Store Sales, Like-for-Like Sales - these all mean roughly the same thing - they exclude sales from new store openings, new store acquisitions, and such like. But Comps is not a standard term with a standard definition. It certainly doesn't conform to GAAP. Unlike many others, Best Buy makes a good job of trying to explain how it determines Comps.

Best Buy's press release says that Comps are: "Comprised of revenue at stores, call centres and web sites operating for at least 14 full months, as well as remodeled and expanded locations. Relocated stores are excluded from the comparable store sales calculation until at least 14 full months after reopening. Acquired stores are included in the comparable stores calculation beginning with the first full quarter following the first anniversary of the date of the acquisition." Exchange rate fluctuations are ignored as far as Best Buy's Comps calculation is concerned.

Best Buy goes on to explain that: "The method of calculating comparable store sales varies across the retail industry. As a result, Best Buy's method of calculating comparable store sales may not be the same as other retailer's methods."