Retail Dogma

# Year-Over-Year (YoY)

## What is YoY?

YoY stands for Year-over-Year, and sometimes also referred to as Year-on-Year. It is used to compare data for a certain time period in a year with the same time period of a previous year.

## Example of YoY

For example, in this 4th quarter and fiscal 2022 annual report, Nike reported the last 3 months of the fiscal year 2022 (Q4) and compared them to the last 3 months from the previous year (2021) to show YoY change for that period. It also did the same for the fiscal year 2022 (12 months) and compared it with the fiscal year 2021.

Note: Nike’s annual reporting period ends on the 31st of May.

In this example the YoY change in revenues for Q4 2022 vs Q4 2021 was -1%. This represents a year-over-year decline of 1%.

However, when we compare the full year (12 months) we find that the business had a YoY growth of 5%.

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## Why Do Businesses Use This Analysis?

Businesses use YoY analysis to compare similar periods to each other, while taking into consideration the seasonality factor, and hence provide a fair, apples-to-apples, comparison between the data.

For example, Q4 is usually the highest quarter for retail businesses in the U.S, due to the holiday season. If a business wanted to measure its Q4 performance, it should compare it to Q4 from the previous year, rather than comparing to Q3 from the same year (quarter-over-quarter comparison), because Q3 doesn’t have the same conditions and the comparison would not be meaningful.

## How is YoY Calculated?

To calculate year over year change, subtract the data of the previous year from the data of the current year to get the change, then divide the result by the data from the previous year, and then multiply by 100 to get the percentage

The YoY growth formula would be:

YoY Growth = ((Current Year – Previous Year)/Previous Year ) x 100