Ask the Experts: Anticipating Slowing Profits

Q: Our business has been a little slow this year so far, similar to the trends that Blacks has been publishing. We are doing okay with profits but I can see them slowing as well. Should I expect a decrease in operational performance?

A: What you’re seeing is not uncommon, but it doesn’t have to be that way. One of my accounts pointed out to me the other day that even though sales had stalled in the first half of the year their gross profit dollars were up.

Business needs to improve to see a long-term improvement in profits, which means that you have to take action. Focus on the fundamentals and squeeze every last cent of profit out of the business. Increase your turn, take fewer markdowns and figure out how to sell smarter. Even though the sales trend is slowing, your business doesn’t have to be put on hold. Stick to your fundamentals and when the sales cycle improves, you will be in a great position to take advantage of the upswing.