What is a common multiple used in the retail industry?

The use of EV/EBITDAR as a common multiple in the retail industry is particularly relevant due to the unique characteristics of retail businesses. This multiple stands for Enterprise Value over Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent. Retailers often have significant lease obligations for their stores, and by excluding rent from the earnings calculation, EBITDAR provides a clearer picture of the company's operational performance, allowing for better comparisons across companies regardless of their leasing structures.

In the retail industry, EBITDAR is preferred because it helps analysts and investors assess the profitability of companies that may have differing levels of rent expenses. Therefore, this multiple is especially useful in evaluating firms that operate on various lease terms, enabling a more accurate comparison of performance and value among competitors.

In contrast, other multiples listed, while they may have applications in specific contexts or industries, do not capture the nuances of retail operations as effectively as EBITDAR. For instance, while EV/EBITDA is a widely used metric, it does not account for rent, which can be a significant expense for retailers. The EV/subscribers multiple is particularly relevant to subscription-based businesses rather than retail. EV/revenue growth measures a company's growth relative to its market value, which may not