Dealer profits down sharply through February

SIOUX FALLS, S.D. – Net profits were down more than 57 percent for the average dealer tracked by Spader Cos. during the first two months of 2007, when compared to the same period of 2006, the company reported in a recent statement.

Through February, the average dealer experienced a net loss of 7.1 percent of sales or $82,146 compared to a net loss of 4.7 percent of sales or $52,234 in the first two months of 2006.

New boat sales, however, were up nearly four percent during the first two months of 2007, from $806,799 to $836,323, and total dealership sales were up 3.8 percent, from $1,119,249 to $1,161,501.

Used boat sales were down 12 percent for the period, from $93,204 in 2006 to $82,026 this year.

New boat inventories (which were up in 2006 and up 8.2 percent for January) continue to run higher in 2007. As of February 28, new inventories were up 6.3 percent, to $4,170,386. And used boat inventories jumped nearly 25 percent, to $419,199 from $336,858 in 2006.

The unit gross margin percentage was down 2.1 points to 16.0 percent, while total company gross margin percentage was down 2.2 points to 27.8 percent.

Spending was up both in terms of dollars spent and also as a percentage of gross margin that was spent. The most significant increases in expenses were in the areas of Floor plan Interest expense and Fixed Expenses.

Spending was up both in terms of dollars and as a percentage of gross margins, it grew by 9.9 points. The most significant increases were in the areas of floorplan interest and fixed expenses, according to Spader.

The training and consulting firm tracks North American boat dealers, both large and small, to compile an average profile, then compares year-over-year trends in a number of different categories.

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