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American Eagle Sept. Same-store Sales Drop 6%

 
Wallace Witkowski
MarketWatch Pulse
     

    SAN FRANCISCO -- American Eagle Outfitters Inc. said late Wednesday that September sales at stores open at least a year fell 6% from a year ago. Analysts surveyed by Thomson Reuters estimated a drop of 5%. Total sales for the five weeks ended Oct. 4 increased 3% to $229.2 million from $222.8 million in the year-ago period. American Eagle narrowed its third-quarter earnings estimate range to 31 cents to 34 cents a share, compared with a previous range of 31 cents to 36 cents a share. Analysts surveyed by FactSet Research estimate 33 cents a share.

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    Same-Store Sales

    Most folks judge the health of a business by the revenue that comes in through sales. But not all revenue is equal. Companies can grow their sales by buying other companies, which means you don't get a clear view of how the real sales trends are moving.

    So, many analysts, particularly those who look at retail, try to gauge what¿s known as "organic" growth, by looking at same-store sales. These are sales only at outlets open more than a year, so the metric can exclude any sales jump that comes from opening new locations. Retailers release same-store sales (which are frequently called "comps" since they're a true comparison from the previous period) every month.

    Retail, incidentally, isn't the only industry to look at same-store sales. Hospital companies, also use the metric, to gauge how existing hospitals are performing compared to ones they just built or acquired.