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Thursday, November 06, 2008
J.C. Penney's October Same-store Sales Fall 13%
Michelle Donley
MarketWatch Pulse
NEW YORK -- J.C. Penney Co. said Thursday that its October sales at stores open at least one year fell 13%, citing declining mall traffic and slower consumer spending. Analysts, on average, had expected same-store sales to fall 13.2%, according to Thomson Reuters. Total sales for the four weeks ended Nov. 1 fell 11.8% to $1.36 billion. The department-store retailer expects third-quarter earnings of 53 cents to 55 cents a share, including a 2-cent gain from a real-estate sale, compared to its previous forecast of 50 cents to 60 cents a share.
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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.






