According to financial information company Sageworks, US clothing retailers have been more profitable in recent years, despite slowing sales growth.
Privately held apparel shops have posted a net profit margin of almost 7 percent, on average, in 2013. That figure is about twice what it was during the preceding two years. Sales however showed slower growth in 2013; at about 5 percent, while in 2011 and 2012 growth was 7 and 9 percent, respectively.
According to Sageworks publicly traded clothing retailers have had net profits holding steady at about 5 percent. But profitably between public and private companies is not easy to compare. Sageworks adjusts the net profit margin for private companies by exclusion of taxes and inclusion of owner compensation beyond their market-rate salaries. Adjustments like these are typically made to private company financial statements so a more accurate view of the company’s operational performance is obtained.
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