The net profits of large RV dealerships, those with more than $10 million in annual sales, declined for the first seven months of 2004 compared with the same period last year, but retailers still are “thriving,” according to consulting firm Spader Business Management.
Net earnings at the large dealerships declined 2.9% through July to an average of $796,698, compared with $820,620 earned during the same portion of 2003, Spader reports.
However, the $796,698 in net profit is equivalent to 6.2% of the average total sales of $12,758,554. RV dealerships posting net earnings equivalent to 5% to 6% of total sales are considered thriving, according to Noel Lais, Spader’s vice president.
In comparison, dealerships with net profits that are 3% to 3.5% of total sales are merely surviving, Lais said.
RV dealerships’ net earnings as a percentage of sales can be expected to decline in November and December because those are typically slow months as consumers focus on holiday season-related buying.
Spader reported that midsize RV dealerships, those generating $5 million to $10 million in annual sales, also saw their net earnings decline through July, although only marginally.
The average dealership earned $334,279 during the first seven months of this year, a 0.3% decline from the $335,315 earned during the same period a year earlier.
Spader said, however, those dealerships also were thriving, achieving net profits equivalent to 6.1% of their total sales of $5,466,550.
Small dealerships, with less than $5 million in annual sales, expanded their net earnings by 8.7% during the first seven months of this year to an average of $187,232, compared to $172,227 in 2003.
Small dealerships also are thriving, with net profits that are equivalent to 6.4% of their $2,912,343 in annual sales during the first seven months of this year.