Monitoring key financial indicators is critical to sound business decisions and long-term financial success. To facilitate the decision making process, Mazars USA has developed an annual benchmarking study.
The benchmarking study allows consumer products companies to compare their financial performance to that of similar high performing companies. The benchmarking data gathered identifies the industry trends and critical issues facing the industry. With the help of benchmarks, financial managers can develop goals, standards, and expectations for financial and operational data and improve their financial performance.
The 2017 study was conducted on high performing companies defined as companies with sales between $70 million and $200 million, importing from overseas and EBITDA of at least 7%:
The following average financial benchmarks were identified based on calendar 2016 results:
- Sales growth – 10%
- Gross margin on net sales: 30% – 35%
- Selling expense as a percentage of sales: 5% – 6%
- Royalties as a percentage of sales: 9% – 12%
- Shipping and warehousing as a percentage of sales: 2%- 4% and most use a 3rd party facility
- General and administrative as a percentage of sales: 8% – 10%
The 2017 study also identified the following trends from those surveyed:
- Anticipated 2017 sales growth: 5% – 10%
- Very little production movement away from China
- Most recent healthcare cost increases: 5% – 10%
- 46% of respondents planned to increase number of employees in 2017
- Key business concerns:
- Changing retailer ie. from brick & mortar to ecommerce
- Improved supply chain costs
- Increasing product and customer profitability
- Employee retention
To see what other trends have been identified and how your company compares, please contact Stuart Nussbaum, Partner and Consumer Products Sector Leader at [email protected].