Dealers profit despite lower sales in May
SIOUX FALLS, S.D. — Despite lower new unit sales, the average dealer tracked by Spader Business Management broke into the profit column at the end of May, according to Spader’s latest financial report. The average net operating profit was 4.1 percent of sales in May 2010 compared to a net operating loss of 5 percent of sales at the end of May 2009.
“A net profit of 4.1 percent of sales at the end of May is very encouraging, especially since it occurred with a 3.5 percent drop in new sales,” Spader said. “Dealers seem to have their inventory and expenses adjusted to the current market conditions.”
The average dealer reported year-to-date new boat sales of $1,508,285 compared to new boat sales of $1,562,353 in 2009. However, total dealership sales of $2,410,296 were up 4.6 percent from the prior year.
Pre-owned boat sales for the average dealer brought in $397,522 compared to $387,820 in 2009, an increase of 2.5 percent.
New boat inventory levels were down from $3,233,571 to $2,128,239, a decrease of more than 34 percent. Spader reported pre-owned boat inventory was down 29.7 percent to $328,541 during this period, resulting in a total inventory decline of 32.2 percent.
The average dealer reduced their dollars spent by about 3 percent compared to last year. All expense categories were down except for variable expenses.
The average gross margin percentage on new boats was up by 2.3 percentage points compared to the average margin earned in 2009.
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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