Comps, explained

Q: What are the “comps” I see mentioned in some reports from retailers? — H.F., Lancaster, Pa. A: Sometimes referred to as “same-store sales,” comps (short for comparables, or comparable-store sales) are sales that occurred at stores that have been open a year or more. Imagine that Piemart Inc. (ticker: GOBBL) reports sales of $100 million in 2021 and $200 million in 2022. That sure seems terrific — 100 percent growth! But what if Piemart had 10 stores open in 2021 and 20 open in 2022? If its same-store sales for 2022 came in at $100 million, then sales at its stores open for at least a year were flat, with 0 percent growth.

Retailers opening new stores are likely to see total sales increase simply because of the new locations. Comps give you a more realistic, apples-to-apples view of how well the business is doing. Ideally, retailers will be increasing sales at existing stores while opening new ones. It’s a red flag if their growth comes mainly from adding stores.

Q: What’s a “full position” in a stock? — B.N., South Bend, Ind.

A: If you’re thinking you’d like to own $5,000 worth of, say, Buzzy’s Broccoli Beer (ticker: BRRRP), that would be your full position. You might buy that much and have a full position immediately, but if you think there’s a decent chance that Buzzy’s may drop in price soon, or you just don’t have $5,000 to spend now, you might establish a partial position by investing $2,500 now, with the intent of buying the remaining $2,500 later.

Buying in installments is actually a good strategy for those investing over long periods, and for those who are just starting to fill out a portfolio.