According to data in the newly released NSGA Cost of Doing Business Survey, almost all specialty retailers, from small to large, improved key measures of profitability and productivity versus two years ago. Almost 150 specialty retailers participated in the survey, done once every two years by the National Sporting Goods Association.
The smallest specialty retailers, those with sales of less than $500,000, improved net profit before taxes to total revenue to 4.9% versus 0.5% two years ago. Shops with sales of $500,000 to $1 million also improved net profit before taxes to total revenue to 4.9% from 2.3% two years ago. Shops with sales of $1 million to $2 million failed to match the results of two years ago, showing net profit before taxes to total revenue of 5.1% versus 5.5% two years ago. The largest specialty retailers, those with sales of more than $2 million, improved net profit before taxes to total revenue to 4.2% versus 3.6% two years ago.
In other key measures of profitability net profit before taxes to total assets, net profit before taxes to net worth, owners compensation & profits to revenue and EBIT to revenue almost all specialty retailers showed strong gains from two years. The most dramatic increase was for shops with sales of less than $500,000, whose net profit before taxes to net worth went from a negative 0.1% two years ago to a positive 14.5% in the current study.
In a key productivity measure, only the smallest retailers (sales of less than $500,000) failed to increase total revenues per selling square foot. For this group, sales per square foot slipped to $137 versus $177 two years ago. The three other groups show healthy improvement shops with sales of $500,000 to $1 million, $313 from $299 two years ago; shops with sales of $500,000 to $1 million, $330 from $308; and shops with sales of more than $2 million, $400 from $352.
“The results of this survey indicates that specialty sporting goods retailers are managing their businesses well,” said NSGA VP and CFO William H. Webb, Jr., who supervised the research report. “For so many of the key indicators to rise, shows that specialty retailers are making prudent business decisions, as well as doing a better job of merchandising in their shops.”
In addition to the segmentation of sporting good stores and specialty sports shops by sales volume, comparison categories include single versus multi-store operations, size of store and marketing mix. The study also provides comparisons to high-profit performing retailers.
In total, there were 185 companies that participated in the new study, up from the 170 companies that participated two years ago.
Besides balance sheet and income data, the NSGA Cost of Doing Business Survey includes five measures of profitability, three measures of financial management and 14 measures of productivity. The study is provided at no cost to NSGA retailer and team dealer members. Non-members can obtain the study for $250.
As an added benefit to NSGA members, a new CODB Performance Worksheet has been designed to serve as an easy-to-use tool for companies to benchmark their operating results in order to pinpoint strengths, weaknesses and improvement opportunities. The Worksheet allows companies to enter select company data once and automatically calculates more than 25 key ratios and financial and performance measures. Complete instructions are included in the file.
