Term · Profitability & Growth
Like-for-like Growth
In briefLike-for-like growth shows revenue growth on a comparable basis, adjusted for openings, closures, acquisitions, and exchange rates. It measures whether the existing core operations grow on their own. The definition of comparable units is not uniformly regulated and should therefore be examined closely.
Definition
Like-for-like growth measures revenue growth on a comparable basis and excludes effects from openings, closures, acquisitions, or exchange rates. Only units that existed in both comparison periods are considered. This reveals whether the core business grows under its own steam.
How it is calculated
Formula. Like-for-like growth = (revenue of comparable units current period ÷ revenue of comparable units prior period) − 1
Why it matters for small caps
Especially in branch-based small caps, overall growth can be driven by expansion or acquisitions. The comparable basis shows whether existing locations are truly getting stronger.
Common misreadings
- Like-for-like growth is not total revenue growth, since contributions from new units and acquisitions are deliberately excluded.
In the process
Frequently asked
What is excluded from like-for-like growth?
Typically revenue from new or closed locations, from acquisitions, and exchange rate effects. What remains is the growth of comparable, continuously existing units.
Why is the metric common in retail?
In branch operations, expansion often masks operating performance. The comparable basis separates growth from new floor space from growth of existing floor space.
Is the definition standardized?
No. Companies themselves define when a unit counts as comparable, for example by operating duration. This is why the notes in the financial statements are important.
Related terms
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.