Parker-Hannifin Corporation or Johnson Controls International plc: Who Manages SG&A Costs Better?

SG&A Cost Management: A Tale of Two Giants

In the competitive landscape of industrial manufacturing, managing Selling, General, and Administrative (SG&A) expenses is crucial for maintaining profitability. Parker-Hannifin Corporation and Johnson Controls International plc, two industry titans, have demonstrated contrasting approaches to SG&A cost management over the past decade.

From 2014 to 2024, Johnson Controls consistently reported higher SG&A expenses, peaking in 2019 with a 6% increase from the previous year. In contrast, Parker-Hannifin maintained a more stable SG&A cost structure, with a notable spike in 2023, doubling their expenses from the previous year. This sudden increase could indicate strategic investments or restructuring efforts.

While Johnson Controls' average SG&A expenses were approximately 2.9 times higher than Parker-Hannifin's, the latter's recent surge suggests a shift in strategy. As these companies navigate economic challenges, their ability to manage SG&A costs will be pivotal in sustaining competitive advantage.