YoY

In detail

Year-over-year compares a figure with the same period twelve months earlier — this quarter against the same quarter last year. The point is to strip out seasonality: a retailer's fourth quarter is always larger than its third, so comparing them sequentially says more about the calendar than the business. It contrasts with quarter-over-quarter (QoQ), which compares consecutive periods and is more sensitive to recent inflection but contaminated by seasonal patterns. Both are useful, and they answer different questions: YoY for the underlying trend, QoQ for what changed most recently. The trap is the base period. A YoY figure is a ratio between two numbers, and an unusual denominator distorts it entirely — growth of 80% against a quarter that was itself depressed is not the same achievement as 80% against a strong one. This is why a company can post excellent YoY growth while performing worse than two years ago. Reading several consecutive YoY figures, rather than one, is what separates a trend from an artifact of the comparison.