New boat sales dip after strong first quarter

SIOUX FALLS, S.D. — While new boat sales were up for the first quarter of 2010, one month later at the end of April, year-to-date new boat sales were down 6.8 percent from last year, based on the average dealer tracked by Spader Business Management. However, dealers did report an increase of 7.3 percent in used boat sales.

Apart from the drop in new boat sales, Spader's latest trend report included several positive indicators. New boat inventory levels at the end of April were 34.9 percent lower than new boat inventories at the end of April 2009; the average gross margin percentage on new boats was up by nearly two percentage points over the average gross margins being earned a year ago (used boat gross margins were up also); and total dealership sales were 2.8 percent above the total dealership sales for the same period one year ago.

The average dealer reported year-to-date new boat sales of $935,074 and average total dealership sales of $2,072,001. This compares to average new boat sales of $1,002,823 and average total dealership sales of $2,016,537 in the prior year.

Pre-owned boat sales for the average dealer tracked by Spader Business Management brought in $248,938.

New boat inventory levels were down from $3,282,602 to $2,136,679. Spader reported pre-owned boat inventory was down 29.2 percent to $337,211 during this period, resulting in a total inventory decline of 33 percent.

During the period, F&I revenue was up 31.3 percent, service revenue dropped 1.2 percent, parts and accessories revenue was up 5.4 percent, marina revenue was down 9 percent and other department sales were up 3.3 percent.

The average dealer reduced their total spending by about two percent compared to a year ago. Variable expenses were higher in 2010 when compared to 2009.

"With a mixed report on sales compared to last year and only a slight reduction in spending, dealers will need to closely watch the financial results during the next couple of months," Spader said in the report.

The average dealer continued to report a net operating loss through the end of April. The average net operating loss for the first four months of 2010 was $68,589 compared to an average net operating loss of $121,297 a year ago.

The average total dealership gross margin percentage was up by nearly one percentage point over last year.

The Spader 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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