Product and Service
Companies included in small household appliance sector in household equipment industry primarily are small electric household appliance manufacturers.
Demand for Product and Service
As indicated by typical sales data, the demand for small household appliance has been stable and fluctuated slightly in the past several years. However, we may be able to see increase in companies’ sales as consumers increasingly purchase more expensive products. It seems that sales performance of companies have been related to economy and consumers’ spending.
The Sector
Sector’s current, trend, causes behind trend, and future
Current and Trend
- Generally, the demand for small household appliance has been stable and fluctuated in a narrow range in the past three years in US market.
- There is a rising trend in product mix to be shifting to higher price products in US market.
- Growth in e-commerce sales seems to have offset the impact of unfavourable retail environment.
- Customers seem to be accepting increased costs/price resulted from products’ innovation or upgrading than domestic market.
Causes behind the trend
Economy situation/consumers spending is the major factor influencing demand for small household appliance.
Dragged down by unfavourable retail environment, sales of companies have been driven more by mass merchandise and online-store than traditional store retail.
Strong demand for higher priced products from international market may be due to growing economy in those markets and thus the increase in income of household and the relative concentration of wealth accumulated resulted from economy growth.
Industry Future
Supported by faster economy recovery, companies’ sales in this sector may go up due to increasing purchasing power for more expensive products while weak growth in demand as a matured market like US.
Numbers
General Financial Performance of Companies In the Sector
Demand for small household appliances seems to have been solid but fluctuated slightly between 2015 and 2017. Based on typical company’s data, changes in sales units have been in range of -1.5% and 1.5%. However, product mix’s shifting to higher price products in US consumer market, together with higher selling price in global commercial market and higher sales volume in global consumer markets, is the major driver behind the large growth in sales of some of typical companies in this sector in the first half year of 2018.
As a result of lower products costs, the typical companies’ gross margin has gone up to about 26% during the same period and the typical operating margin is at around 5% with a higher SG&A as percentage of sales of about 21% in 2018.
The typical average enterprise price/EBI ratio is: 18(interest/EBI ratio of 9%) and stock price/sales ratio is 0.5.
