Dealers doing better than last month, but that’s not saying much

While dealer net profits through July are off 60 percent, the rate of decline appears to be slowing. Through June, net profits, year over year, were off almost 86 percent.

That’s according to Spader Business Management, whose latest numbers show the average dealer they track earned a net profit of $93,614 for the seven months ending July 31. That compares to an average net profit of $229,706 for the same time frame last year.

Not great, but as mentioned, a lot better than last month — when the average dealer showed a net profit of only $23,955 for the first six months of the year, compared to $170,102 in 2008.

“We’ll have to watch for August results to see if dealers are building enough cash to get them through,” Spader suggests in its latest report for Boating Industry.

Overall, spending in terms of dollars had been running about 20 percent lower than 2008. However, the level of spending increased slightly during July and ended the seven months at 18 percent lower than 2008 spending levels, the report notes.

Below are some other numbers for you to digest, most of which are improved from June but down from ’08:

New boat sales for the average dealer tracked by Spader were down 37.8 percent for the first seven months of the year compared to the same time frame in 2008.

Sales dropped from $3,798,783 to $2,364,361. Pre-owned boat sales were down 3.2 percent to $705,797. New boat gross margin percentages were one and one half percentage points lower in 2009 than they were in 2008.

New boat inventory levels were down 18.5 percent — from $3,462,417 to $2,822,411. Spader reported pre-owned boat inventory was up 1.9 percent to $414,093 during this period, resulting in a total inventory decline of 16.3 percent.

Total dealership sales fell 25.9 percent to $4,947,498 during the first seven months, compared to the same period of 2008. F&I revenue fell 41.6 percent and service revenue dropped 11.8 percent, while parts and accessories sales were down 9.3 percent, marina revenue was down 8.8 percent and other department sales fell 12.7 percent.

The total dealership gross margin percentage was up by nearly one percentage point. However, much of that is because boat sales are down, which means a greater percentage of revenue is coming from other higher gross margin areas such as Parts & Accessories, Service, Finance & Insurance and Marinas, Spader said.

Unit gross margin percentages were down by 1.7 percentage points to 15.3 percent, compared to last year.