On the value relevance of retailer advertising spending and same-store sales growth

K. Tuli, A. Mukherjee, M.G. Dekimpe

Research output: Contribution to journalArticleScientificpeer-review

Abstract

In response to recent calls to study factors that determine a retailer's stock price, this study draws on signaling theory to examine the impact of two key marketing metrics that are widely disclosed by retailers to investors, advertising spending and growth in same-store sales (COMPS), and highlights the moderating role of various firm- and sector-specific factors. Using a stock-response model estimated on a sample of 1,646 observations for 257 retailers, the authors find that the value relevance of advertising spending and COMPS depends on the financial condition of, and the competitive pressures faced by, the retailer. In addition, the positive effect of COMPS on stock returns is found to be stronger in the presence of decreases in advertising spending.
Original languageEnglish
Pages (from-to)447-461
JournalJournal of Retailing
Volume88
Issue number4
DOIs
Publication statusPublished - 2012

Fingerprint

Value relevance
Retailers
Sales growth
Investors
Stock prices
Stock returns
Marketing metrics
Financial condition
Specific factors
Factors
Signaling theory

Cite this

@article{d36eea6d632f488384cb28d6c6b4045e,
title = "On the value relevance of retailer advertising spending and same-store sales growth",
abstract = "In response to recent calls to study factors that determine a retailer's stock price, this study draws on signaling theory to examine the impact of two key marketing metrics that are widely disclosed by retailers to investors, advertising spending and growth in same-store sales (COMPS), and highlights the moderating role of various firm- and sector-specific factors. Using a stock-response model estimated on a sample of 1,646 observations for 257 retailers, the authors find that the value relevance of advertising spending and COMPS depends on the financial condition of, and the competitive pressures faced by, the retailer. In addition, the positive effect of COMPS on stock returns is found to be stronger in the presence of decreases in advertising spending.",
author = "K. Tuli and A. Mukherjee and M.G. Dekimpe",
year = "2012",
doi = "10.1016/j.jretai.2012.07.001",
language = "English",
volume = "88",
pages = "447--461",
journal = "Journal of Retailing",
issn = "0022-4359",
publisher = "Elsevier BV",
number = "4",

}

On the value relevance of retailer advertising spending and same-store sales growth. / Tuli, K.; Mukherjee, A.; Dekimpe, M.G.

In: Journal of Retailing, Vol. 88, No. 4, 2012, p. 447-461.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - On the value relevance of retailer advertising spending and same-store sales growth

AU - Tuli, K.

AU - Mukherjee, A.

AU - Dekimpe, M.G.

PY - 2012

Y1 - 2012

N2 - In response to recent calls to study factors that determine a retailer's stock price, this study draws on signaling theory to examine the impact of two key marketing metrics that are widely disclosed by retailers to investors, advertising spending and growth in same-store sales (COMPS), and highlights the moderating role of various firm- and sector-specific factors. Using a stock-response model estimated on a sample of 1,646 observations for 257 retailers, the authors find that the value relevance of advertising spending and COMPS depends on the financial condition of, and the competitive pressures faced by, the retailer. In addition, the positive effect of COMPS on stock returns is found to be stronger in the presence of decreases in advertising spending.

AB - In response to recent calls to study factors that determine a retailer's stock price, this study draws on signaling theory to examine the impact of two key marketing metrics that are widely disclosed by retailers to investors, advertising spending and growth in same-store sales (COMPS), and highlights the moderating role of various firm- and sector-specific factors. Using a stock-response model estimated on a sample of 1,646 observations for 257 retailers, the authors find that the value relevance of advertising spending and COMPS depends on the financial condition of, and the competitive pressures faced by, the retailer. In addition, the positive effect of COMPS on stock returns is found to be stronger in the presence of decreases in advertising spending.

U2 - 10.1016/j.jretai.2012.07.001

DO - 10.1016/j.jretai.2012.07.001

M3 - Article

VL - 88

SP - 447

EP - 461

JO - Journal of Retailing

JF - Journal of Retailing

SN - 0022-4359

IS - 4

ER -