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Non-Tech : CompUSA (CPU)
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To: blankmind who wrote (2055)4/5/1999 1:29:00 PM
From: Mark R  Read Replies (1) of 3187
 
Whats wrong with Same Store Sales (SSS)????

The whole idea in my opinion.
I think SSS figures for CPU are at best misleading and at worst completely useless.

Same store sales are designed to reflect the health of a retailer by reflecting revenue growth which in theory is either increased customers or increased sales per customer. Both would be valuable for analyzing retailers. These figures are taken from stores open a year or more to discount opening bubbles, ramp up times for customers to find the stores etc.

My "reasons why" i don't think it applies to CPU

1) SSS for stores open one year do not reflect the impact of lots of new stores on the bottom line...(if they opened a couple of stores a year then the measurement might lead to a better overall company valuation.)
2) SSS do not reflect decreasing product prices. Therfore we don't know if we have more customers or if they purchase more than before...we just know what they purchase is cheaper. Moores Law says this is a fact of life yet it runs completly contrary to the idea of SSS>
3)SSS do not reflect CPUs in house outbound business sales. These are reported in each stores number but we have no idea what sales came from where...."the store could lock the front door and still have SSS.
4) SSS shouldn't apply to the service and training either. These are not retail concepts nor would a SSS analysis give you the end high margin contribution of these activities vs the stores. ie we could lose training and repair, SSS could be up, and the company could be losing money. (Like CCI)

So sure CPU is a retailer but not like any other. The more useful information would be Computer product retailing market size and growth % vs CPUs share and growth %.

I think Halpin should talk about this when it doesn't look like an excuse for bad numbers. Today I see big SSS declines yet I know PC numbers are up but ASPs are down. So do we have more customers? Are they buying more from CPU, and, other factors are hiding the truth? We do not know as investors and that's not a good thing.

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