The language of retail, defined.

planned sales + planned markdowns + planned closing stock − opening stock

The value of stock a retailer can still receive in a period and finish it at the stock level planned. Worked at cost, and normally recalculated each month against where stock actually stands rather than held as a fixed season budget.

The sales, margin, markdown, stock and receipt figures for a year, set by month before the year starts. Every buying decision is measured against it.

Planned sales by month, usually built from last year's actuals plus a growth assumption, then shaped to the way the business trades.

What needs to land each month to hold the stock position the plan assumes. The receipt plan is what the open to buy is drawn from.

A weekly grid of sales, stock, intake and markdown, planned against actual. The standard in-season control document in UK and Australian retail.

Top-down sets a total and divides it across departments and brands. Bottom-up builds the total from individual lines. Most businesses do both and reconcile the gap.

Pre-season sets the plan before trading. In-season re-forecasts it against what actually sold, which is where most of the money is saved or lost.

Stock written at market, months ahead of delivery, against a season rather than against current stock. Common in multi-brand fashion and the reason buying budgets have to be managed by season, not by month alone.

The period when a season's collections are shown and orders are written. The buying decision is made here, usually faster and with less information than anyone would like.

The agreed period a brand will ship within. One order often arrives in several drops, which is why a commitment has to be planned against the months it lands in, not the month it was written.

The formal record of an order placed with a supplier. In wholesale fashion the PO is frequently raised well after the order is agreed — sometimes not until the stock arrives — which is why a written commitment has to be tracked separately.

The smallest quantity a supplier will produce or ship. It sets the floor on how narrow an assortment can be.

The time between placing an order and having the stock available to sell. Nearshore production runs weeks, long-haul production runs months, and the difference changes how much has to be committed on forecast.

The commercial conditions attached to an order — payment terms, discount, returns, markdown support, delivery windows and cancellation rights. Often worth more than the price negotiation.

Stock held by the retailer but owned by the supplier until it sells. It removes the stock investment and usually costs margin.

Sell-in is what the brand sold to the retailer. Sell-out is what the retailer sold to the customer. A healthy sell-in with weak sell-out is a markdown waiting to happen.

The number of distinct choices offered — styles, or style and colour combinations. More options spread the same money thinner, so depth and breadth are traded against each other every season.

How a quantity is split across sizes. Taken from what actually sold rather than what was bought, or the curve simply repeats last season's broken sizes.

The lowest level a retailer counts stock at — normally style, colour and size. Everything above it is an aggregation.

Stock at the beginning and end of a month, at cost or at retail. Each month's closing stock is the next month's opening stock, which is why an error in one month carries forward.

cost of goods sold ÷ average stock at cost

How many times stock is sold and replaced over a period. Higher turn means less capital tied up for the same sales.

stock on hand ÷ average weekly rate of sale

How many weeks the current stock would last at the current rate of sale. Calculated in units rather than dollars where possible, so markdown does not distort it.

units sold ÷ units available

The proportion of what was available that actually sold. Always state the period and the base — sell-through on units received and sell-through on units sold plus on hand are different numbers.

Stock held beyond a set age, usually ninety days. The threshold is a choice, and continuity lines will sit in the pool without being a problem, so an aged figure is only useful once core lines are separated out.

Stock bought for one season and still held in the next. Planned carryover is normal in core and basics. Unplanned carryover is last season's buying error arriving as this season's markdown.

Stock held above forecast demand to absorb variation in sale or supply. The cost of holding it is traded off against the cost of being out of stock.

Lines reordered against sale through the season rather than written once at market. They need a stock rule, not a buying decision.

Dividing received stock across stores and channels. A good buy allocated badly performs like a bad buy.

(book stock − counted stock) ÷ sales

Stock the system says is held that the count cannot find — theft, damage, miscounting and receiving errors. It comes straight off margin and is only visible at stocktake.

units sold ÷ weeks on sale

How fast a line sells once it is available. The cleanest way to compare lines that landed at different times, because it removes the advantage of having been on sale longer.

How long a line has actually been available, from the date it became sellable rather than the date it was received. A line sitting in a stockroom is not on sale.

units sold at full price ÷ units available

How much of a line sold before any discount. A line can reach high total sell-through and still have lost money getting there, which total sell-through hides.

The stock level at which a reorder has to be placed to arrive before the line runs out. Set from rate of sale and lead time together — either one alone gives the wrong answer.

Core lines repeat season to season and are managed on a stock rule. Fashion lines are bought once for a season and managed on a markdown plan. Treating one as the other is the most common range management error.

The planned sequence of reductions a line moves through if it does not clear — the depth of each step and the weeks between them, set before the season rather than negotiated in panic at the end.

What is still held once a line has finished its markdown sequence. It is the clearest measure of whether the original buy was right, and the only one nobody wants to look at.

A line still holding stock but missing the core sizes. It reads as available and sells like it is gone, which is why unit cover alone overstates the position.

What the stock sold in a period actually cost. Whether freight, duty and landing costs sit inside it varies by business — agree it before comparing margin to anyone else's.

(net sales − cost of goods sold) ÷ net sales

What is left after the cost of the goods, before operating costs. State whether it is ex tax, and whether returns are deducted.

(retail price − cost price) ÷ retail price

The margin a line is ticketed at before any discount. It is the ceiling on what the line can earn, not what it will earn.

The margin actually achieved after markdowns, shrinkage and discount. The gap between initial and maintained markup is the real cost of over-buying.

original retail − current retail

Any reduction in retail price after a line has been ticketed and put on sale. Usually expressed as a percentage of sales so it can be planned.

gross profit ÷ average stock at cost

What each dollar of stock returns in gross profit. The single most useful figure for comparing brands or categories that carry different margins and turn at different speeds.

The cost of a unit on the shelf — supplier price plus freight, duty, insurance and any handling. Margin worked on supplier price alone overstates itself.

Pricing at double the cost price, a 50% initial markup. A convention rather than a rule, and a poor default where freight and duty are heavy.

gross profit − costs directly attributable to that product

What a line contributes once the costs it causes are charged to it. A high gross margin line that is bulky, heavily returned or always discounted can contribute less than a plainer one.

Everything spent getting one unit to a paying customer and keeping it there — pick and pack, outbound freight, returns handling, payment fees, packaging. Rarely allocated to the product, which is why product-level margin is usually overstated.

units returned ÷ units sold

The proportion of sold units that come back. Online fashion runs far higher than store, and a line with a fit problem can read as a bestseller on gross sales alone.

(full retail value of units sold − actual sales) ÷ full retail value

The gap between what stock was ticketed at and what it actually realised, across everything — planned markdown, promotions, staff and loyalty discounts, and price overrides at the till.

What is left after cost of goods and the operating costs attributed to the sale. The figure that answers whether a line is worth repeating, which gross margin cannot.

Inbound freight belongs in the cost of the product. Outbound freight belongs in the cost of the sale. Mixing them makes the margin on heavy or bulky lines look better than it is.

Money contributed by the supplier against markdown, marketing or damaged stock. It is real margin and is frequently missing from product-level reporting entirely.

Sales from stores and channels trading in both periods, so growth from new openings is stripped out. State the qualifying period — a store refit or a closure mid-period will move the number on its own.

transactions ÷ traffic

The proportion of visitors who buy. The fastest lever in most retail businesses, because the traffic is already paid for.

net sales ÷ transactions

What a customer spends per visit. Moves on price, on units per transaction, or on mix — and the three call for different responses, so never read it alone.

units sold ÷ transactions

How many items go into a sale. The measure of whether add-on selling and range adjacency are working.

How many people came in, counted at the door or as sessions online. Without it, a sales fall cannot be separated into fewer people or worse selling.

How sales divide across categories, brands, channels or price points. A flat total with a shifted mix is a different business from a flat total with a stable one.

net sales ÷ trading area

What a store earns from the space it occupies. The standard way to compare sites of different sizes, and the basis of most rent negotiations.

Cumulative performance against the same period last year. Check the calendars align — a shifted Easter or an extra trading week makes a comparison meaningless.

Sales, cost of goods, gross profit and operating costs for a period, read as a trading statement rather than a statutory one. Most useful when it is current on any day of the month rather than assembled after it closes.

A proxy for operating cash generation. Widely used in valuation, which is why it attracts adjustment — always ask what has been added back.

opening stock at retail ÷ sales for that month

How many months of sales are sitting in stock at the start of a month. The classic test of whether a stock plan is realistic before any buying is done against it.

(average stock at cost ÷ cost of goods sold) × 365

How long stock sits before it sells. The same information as stock turn, expressed in days, which is the form the cash conversation uses.

days inventory outstanding + days receivable − days payable

How long cash is tied up between paying a supplier and being paid by a customer. Supplier terms can matter as much to it as how fast the stock sells.

Current assets less current liabilities. In retail it is mostly stock, which is why a buying decision is a cash decision whether or not anyone frames it that way.

gross profit ÷ selling area

What the floor earns, rather than what the stock earns. Read alongside GMROI, since a category can be excellent on stock and poor on the space it takes.

The plan is what was intended, the budget is what was committed to, and the forecast is what is now expected. They are three different numbers and arguments start wherever they are used interchangeably.