Boulder — Two benchmarking reports released today by Outdoor Industry Association indicate that the outdoor industry has emerged from the recession leaner and more profitable.
The Manufacturer Benchmarking Report and the Retailer Benchmarking Report are based on 2010 financial data provided by 61 manufacturing companies and 59 retailers. These studies are among the most important tools that OIA offers its members to help improve their profit and financial performance.
The reports analyze industry-wide operating norms and performance metrics which outdoor companies can use to compare against their own results. “The [manufacturer] benchmarking report shows us detailed comparisons in compensation and sourcing trends that we find valuable,” said Audrey Hicks, CFO for Outdoor Research, which was among this year’s respondents. “It’s important to see how the shifts and challenges are trending and where we fall within those trends.”
The report confirms what many small, independent retailers have been reporting anecdotally since the recession: they have found ways to make more money on fewer sales and with less inventory. Respondents identified as high-profit retailers in this year’s study reported an average gross margin of 46.5 percent, up from 43.1 percent in 2008. Importantly, a significant number of the participating retailers were smaller shops, making the results relevant to independent specialty retailers looking to compare themselves with peers.
On the manufacturing side, gross margin for high-profit respondents averaged 52.5 percent in 2010, up from 48.4 percent in 2007, again illustrating how the recession and slow recovery have caused many companies to tighten up operations and raise the bar for the whole industry. “We find the study very useful, looking at P&L benchmarks and how we compare,” said Bill Hartrampf, president of Deuter USA. “It’s the kind of information we can use with future budgeting plans.” The manufacturers report also includes sourcing information for those who are closely following production and pricing shifts originating in Asia.
Both benchmarking reports are available online free of charge to OIA members. Moreover, both member and non-member companies that participate in OIA benchmarking studies also receive, at no charge, a private report that compares their own results to industry norms and their peer group and includes suggestions on how to improve performance.
“As businesses examine costs and productivity, information about financial and operational norms becomes more important than ever to remain competitive,” says LaRae Marsik, vice president of business intelligence at OIA, “Identifying how your firm compares against a field of competitive firms is an invaluable business tool in today’s constantly changing marketplace.”