NSGA: Team Dealers Improve Profitability, Reduce Expenses

November 25, 2008
SGB Update

Team dealers matched two of three key profitability benchmarks and three important productivity measures from the previous study, according to data contained in the new NSGA Cost of Doing Business Survey, published by the National Sporting Goods Association.

Net operating profit remained at a 10-year high of 2.8% in the new study, matching dealer performance in the previous survey. In earlier studies (2004, 2002, 2000 and 1998), net operating profits were 2.6%, 1.8%, 2.5% and 1.9% respectively. Return on Total Assets in 2008 (4.6%) also equaled that measure from the previous survey.

Gross Margin on Merchandise Sales slipped for the second consecutive survey to 31.4% from 32.5% in 2006 and 32.6% in 2004. However, this year’s Gross Margin still was equal or better than in three earlier reports, when Gross Margins were 31.4% (2002), 31.1% (2000) and 30.6% (1998).

Team dealers did a better job of controlling Operating Expenses for the second consecutive survey, 28.8%, compared to 29.8% in the previous study. In 2004, Total Operating Expenses were 30.2%, the highest level in the last 10 years.

Team Dealers also experienced a sharp increase in inventory turnover, 5.0x, up from 4.0x in 2006. This is the highest inventory turnover rate in the last 10 years.

Sales per Outside Salesperson surpassed its previous high with $756,153, up from $729,000 in the previous report.

“One factor affecting this number is the increased percentage of high-volume businesses that took part in this year’s survey, along with general growth in the team sector,” said NSGA VP and CFO William H. Webb, Jr., who supervised this research report. “More than half of the dealers participating in this year’s survey can be classified as high volume (more than $3 million in sales).”

According to Webb, “This research effort provides sporting goods team dealers and retailers with the most up-to-date benchmarking information available anywhere.”

In addition to the segmentation of team dealers, full-line sporting goods stores and specialty 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.

NSGA: Team Dealers Improve Profitability, Reduce Expenses

SGB Update

Team dealers matched two of three key profitability benchmarks and three important productivity measures from the previous study, according to data contained in the new NSGA Cost of Doing Business Survey, published by the National Sporting Goods Association.

Net operating profit remained at a 10-year high of 2.8% in the new study, matching dealer performance in the previous survey. In earlier studies (2004, 2002, 2000 and 1998), net operating profits were 2.6%, 1.8%, 2.5% and 1.9% respectively. Return on Total Assets in 2008 (4.6%) also equaled that measure from the previous survey.

Gross Margin on Merchandise Sales slipped for the second consecutive survey to 31.4% from 32.5% in 2006 and 32.6% in 2004. However, this year’s Gross Margin still was equal or better than in three earlier reports, when Gross Margins were 31.4% (2002), 31.1% (2000) and 30.6% (1998).

Team dealers did a better job of controlling Operating Expenses for the second consecutive survey, 28.8%, compared to 29.8% in the previous study. In 2004, Total Operating Expenses were 30.2%, the highest level in the last 10 years.

Team Dealers also experienced a sharp increase in inventory turnover, 5.0x, up from 4.0x in 2006. This is the highest inventory turnover rate in the last 10 years.

Sales per Outside Salesperson surpassed its previous high with $756,153, up from $729,000 in the previous report.

“One factor affecting this number is the increased percentage of high-volume businesses that took part in this year’s survey, along with general growth in the team sector,” said NSGA VP and CFO William H. Webb, Jr., who supervised this research report. “More than half of the dealers participating in this year’s survey can be classified as high volume (more than $3 million in sales).”

According to Webb, “This research effort provides sporting goods team dealers and retailers with the most up-to-date benchmarking information available anywhere.”

In addition to the segmentation of team dealers, full-line sporting goods stores and specialty 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.

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