Larger full-line sporting goods retailers showed stronger key measures of productivity and profitability than did their smaller counterparts, according to data in the newly released NSGA Cost of Doing Business Survey. For the current study, larger full-line retailers were defined as those with sales of $3.5 million or more.
Larger retailers were stronger in all profitability measures, including net profit before taxes to net worth (4.4% versus 2.4%), net profit before taxes to net worth (18.2% versus 14.2%) and EBIT to revenues (4.6% to 3.4%).
Compared to two years ago, smaller retailers show more improvement than their larger counterparts. For smaller full-line retailers, net profit before taxes to net worth rose from 0.3% two years ago to 2.4% in the current survey. Net profit before taxes to net worth rose from 10.8% to 14.2% and EBIT to revenues 0.9% to 3.4%. In the previous study, the larger/smaller retailers were defined as above or below $2 million.
“Full-line sporting goods retailers of all sizes have been making sound business decisions, and their profitability and productivity results are evidence of that,” said NSGA VP and CFO William H. Webb, Jr. “This years survey shows that retailers are more productive and more profitable, which can only be achieved through sound business practices.
Larger full-line retailers showed productivity gains compared to the previous survey, done two years ago in Sales per Selling Square Foot ($374 versus $351), Sales per Employee ($192,000 versus $168,000) and Inventory Turnover (3.6x versus 2.9x). Although they showed improved Sales per Employee ($184,000 versus $138,000), smaller full-line retailers slipped in Sales per Selling Square Foot ($234 versus $299) and Inventory Turnover (2.5 x versus 2.7x).
There were 185 companies that participated in the new study, up from the 170 companies that participated two years ago.
