Selling, General & Administrative Expenses (SG&A)

RECENT NEWS
SeekingAlpha  Jul 14  Comment 
By Corey Sommers: There aren't a lot of levers left for J.C. Penney (NYSE:JCP) to pull in the short term that might meaningfully move the company's stock price higher. SG&A has been cut about as much as it can and is holding steady at around $1B...
Benzinga  Jun 19  Comment 
In a report published Thursday, D.A. Davidson & Co. analyst Andrew Burns reiterated a Neutral rating and $82.00 price target on Nike (NYSE: NKE). In the report, D.A. Davidson & Co. noted, “Our F4Q revenue and EPS estimates are $7.350 billion...
Forbes  Jun 4  Comment 
The company expects the sale or wind-down of its cellular baseband business to result in a $700 million reduction in annualized GAAP research and development (R&D) and selling, general and administrative (SG&A) expenses, including $100 million in...
Forbes  May 28  Comment 
Apart from revamping its fashion content, Abercrombie is planning to bring its prices down to a more competitive level. To ensure that this move doesn’t put pressure on its margins, the retailer is taking certain steps to lower its SG&A expenses...
Benzinga  May 19  Comment 
In a report published Monday, Morgan Stanley analyst Kimberly C. Greenberger reiterated an Underweight rating and $36.00 price target on Coach (NYSE: COH). In the report, Morgan Stanley noted, “COH's 10-Q confirmed what we feared: North...
FiercePharma  Apr 30  Comment 
When Big Pharma starts talking about big buyouts, the sales and marketing departments start chattering about their jobs. Last week's Novartis-plus-GlaxoSmithKline cancer deal is one prime example. Another, bigger one: Pfizer's proposed...
SeekingAlpha  Mar 26  Comment 
ByElephant Analytics: After taking a look through J.C. Penney's (JCP) 10-K filing, it appears that the surprising Q4 SG&A drop is likely mainly due to timing and accrual reversals. The full-year SG&A number is an accurate reflection of J.C....
Forbes  Mar 18  Comment 
In addition to generating better comparable sales by keeping products inline with customer tastes, Ann is looking to improve its operating margins. If Ann?s efforts to reduce its SG&A expenses and cost of goods yield fruitful results, it can...
FiercePharma  Mar 12  Comment 
Big Data could be a big deal for Big Pharma's commercial operations. It could help top drugmakers slash another $35 billion-plus in costs over the next several years, to keep margins up. But it's small drugmakers that could benefit most...
Benzinga  Feb 28  Comment 
In a report published Friday, Morgan Stanley analyst Ricky R. Goldwasser reiterated an Equal-Weight rating on Catamaran (NASDAQ: CTRX). In the report, Morgan Stanley noted, “We view CY14 EBITDA guidance of $760-$810, as realistic, not...




 
TOP CONTRIBUTORS

Selling, General & Administrative Expenses is the sum of all selling expenses and all general and administrative expenses

Selling, General & Administrative Expenses (alternately SG&A) is an income statement item that refers to a company's operating expenses outside of cost of sales.

Items commonly included in SG&A are not directly attributable to production. Examples of SG&A include employee salaries, commission bonuses, pension costs, marketing costs, insurance, rent and utilities, and maintenance.

While cost of sales are easily controlled, SG&A expenses are more difficult to manipulate. A company can keep its cost of sales down by limiting raw material purchase and adjusting its manufacture/service-production during a given accounting period. SG&A expenses are oftentimes fixed recurring expenses, and thus not as easily adjustable (i.e. payroll expense).

Investors look to SG&A as a measure of how efficiently a company is using its money. A company maintaining an SG&A that is a high percentage of revenue relative to other companies in its sub-industry would may indicate an inability to adapt to market downturns, as SG&A expenses are not easily changed in a short period of time (money being tied up in things like salary and office rent).

Unless a company is very research and development focused, SG&A expenses tend to be one of the largest of a company's operating expenses.

Example

  • Company XYZ, a widget maker, reports net income of $2 million dollars with a $800 thousand cost of goods sold for a gross profit of $1.2 million. The company spends $200 thousand on research and development and $600 thousand on SG&A expenses. SG&A, then, is 30% of XYZ's total revenues (600 thousand / 2 million) and
  • Company ABC, also in the widget industry, the same year reports net income of $5 million dollars with a $1.5 million cost of goods sold for a gross profit of $3.5 million. The company spends $500 thousand on research and development and $2 million on SG&A expenses. SG&A, then, is 40% of ABC's total revenues (2 million / 5 million).
  • Despite XYZ's relatively higher cost of goods sold (40% of revenue vs 30%), all other things being equal an investor would likely view XYZ better suited to deal with a market downturn or other unforeseen negative stressor on the market, as it's relatively lower SG&A expenses equate to an easier reduction of total expenses should it be necessary, as it is harder for company to reduce SG&A expenses than others.
Please install Flash Player to view this chart.
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki