Profitability-Reporting-and-Regional-Sales-Insights-for-Retail-Company

Table of Contents

1. Business Overview
2. Project Overview
3. Data Overview
4. Dashboard
5. Business Insights and Analysis
6. Conclusion
7. Recommendation

Business Overview

Nexus Retail is a nationwide retail chain with over 30 stores, offering a diverse range of products across different regions in the United States. With stores varying in size from 57,000 to 103,000 square feet, the company faces challenges in managing both operational costs and sales performance efficiently. Each store experiences a fixed weekly cost of rent and wages, while sales targets range from $600,000 to $700,000. Nexus Retail has been struggling with profitability consistency, where some stores are exceeding their sales targets while others lag behind due to high fixed costs or declining sales. To maintain competitive growth, the executive team needs better visibility into the financial performance of each store, the ability to analyze regional performance, and insights into how to optimize store-level operations to boost profitability. The need for comprehensive financial and sales data analysis is paramount for Nexus Retail to make data-driven decisions and improve its bottom line.

Project Overview

The objective of this project is to develop a dynamic PowerBI P&L financial dashboard to help Nexus Retail gain valuable insights into its financial and operational performance. By consolidating data across 2,600+ records, including sales, wages, rent, and other operational costs, created an interactive PowerBI dashboard that enabled Nexus Retail's executive team to track key performance indicators (KPIs) such as gross margin (GM%), EBIT%, and sales growth (YoY) across all stores. The dashboard allowed the team to :

1. Optimize Store-Level Profitability
2. Reduce Operational Costs
3. Enhancing Sales Performance
4. Regional Performance Optimization

Using this dashboard, the company was able to make real-time decisions to optimize its cost structure, enhance sales performance, and improve overall profitability.

Data Overview

The dataset consists of over 2,600+ records, encompassing operational and financial data for all stores over several months, enabling a detailed examination of store-level performance.

Key Metrics:

Wages: Weekly wage costs range from $120,000 to $165,000 per store.

Rent: Fixed rent expenses vary between $140,000 and $170,000 weekly.

Target Sales: Weekly sales goals set between $600,000 and $700,000 per store.

Sales Data: Sum sales for the dashboard are approximately $1.387 billion.

Geographic Coverage: Stores spread across multiple regions, enabling regional performance analysis.

Store sizes: Ranging from 57,000 to 103,000 square feet

Dashboard

Business Insights and Analysis

The P&L dashboard provided critical insights into the financial performance of each store, focusing on key metrics like:

• Sales Performance: Monthly sales data revealed variations in performance across different stores, with certain regions exceeding sales targets while others fell short. The YoY growth metrics (Sales YoY Growth of 4.17%) identified upward trends in sales across the chain, while stores in underperforming regions were highlighted for further investigation.

• Gross Margin (GM%): At an average of 55.18%, the GM% showed a steady margin, but further analysis of Cost of Sales (COS) revealed potential opportunities for cost optimization in supply chain and vendor contracts, especially in stores with higher operating costs.

• EBIT% and Growth: EBIT (Earnings Before Interest and Tax) remained healthy at 15.79%, but the low YoY growth of EBIT (0.56%) indicated the need for strategies to enhance profitability.

• Cost Breakdown: The dashboard allowed for an in-depth analysis of store operating costs (Rent, Wages, Other Costs), revealing that stores in urban regions faced higher rent and wage costs compared to stores in suburban areas, impacting overall profitability.

Conclusion

The P&L dashboard successfully provided the Nexus Retail executive team with a clear view of their financial and operational performance. By analyzing key financial metrics and operational costs, the business was able to identify high-performing stores, underperforming regions, and areas where operational costs could be optimized. Stores in regions such as California and New York showed higher operational costs, while Midwest stores achieved better cost control and profitability. These insights are essential for guiding future business strategies aimed at improving cost efficiency and increasing sales performance across the chain.

Recommendations

Based on the analysis provided by the P&L dashboard, the following recommendations are suggested:

• Optimize Store-Level Operational Costs: Stores with high fixed costs, such as those in California and New York, should focus on cost reduction strategies. Potential actions include renegotiating rent contracts to save up to 5-7% in rent costs annually and improving labor efficiency to cut wage expenses by 3-5%.

• Regional Strategy Optimization: Underperforming regions should be targeted with tailored marketing strategies and operational improvements. A marketing budget reallocation of 15% towards underperforming regions could drive a 4-6% increase in sales growth YoY in those areas.

• Profitability Enhancement: Focus on improving EBIT growth by adjusting pricing strategies and optimizing inventory levels. Reducing stockouts by 12% and optimizing pricing models could lead to a 5% improvement in EBIT YoY, contributing to an estimated $3M in additional annual profit chain-wide.

• Automation and Real-Time Monitoring: Continue automating real-time financial reporting within PowerBI, with a goal of reducing manual reporting time by 40+ hours per month, freeing resources for strategic analysis and improving data-driven decision-making capabilities across the organization.