What is like-for-like?
This is a way of measuring growth in sales. It’s widely used in the retail sector to assess how well companies are performing.
Key takeaways
Like-for-like is a sales growth measurement method widely used in the retail sector to assess and compare how well companies are performing over specific time periods.
Companies report like-for-like sales by comparing their performance over a set period to the same period one year earlier, such as Q2 2017 versus Q2 2016.
This valuation method strips out the effects of factors like expansion and store closures, only taking into account activities that were in effect during both time periods.
Like-for-like sales typically measure the increase or decrease only at stores that have been open for at least two years and are usually reported as a percentage.
As an example, pub chain JD Wetherspoons reported like-for-like sales growth of 5.3% in July 2017, attributing the positive performance to warm weather conditions.
Where have you heard of like-for-like?
When companies report their latest results they usually include like-for-like sales showing their performance over a set period of time compared to the same period one year earlier. So for example, a company may release results comparing the second quarter of 2017 to the second quarter of 2016.
What you need to know about like-for-like…
This method of valuation tries to strip out the effects of factors like expansion and store closures. This means it only takes into account activities that were in effect during both time periods. This might mean measuring the increase or decrease in sales only at stores that have been open for at least two years. Like-for-like sales are usually reported as a percentage. So for example, the pub chain JD Wetherspoons reported like-for-like sales growth of 5.3% in July 2017 thanks to the warm weather.