Optimizing SG&A Costs: A Tale of Two Companies

In the competitive landscape of industrial and commercial sectors, managing Selling, General, and Administrative (SG&A) expenses is crucial for profitability. Over the past decade, Watsco, Inc. and Nordson Corporation have demonstrated contrasting strategies in optimizing these costs.

A Decade of Financial Strategy

From 2014 to 2023, Watsco, Inc. has seen a significant increase in SG&A expenses, peaking at over 1.2 billion in 2022, reflecting a growth of approximately 87% from 2014. This trend suggests a strategic investment in administrative capabilities to support expansion. In contrast, Nordson Corporation maintained a more stable SG&A trajectory, with a modest increase of around 40% over the same period, indicating a focus on cost efficiency.

The Missing Year

While Watsco's data for 2024 is unavailable, Nordson's expenses surged, hinting at potential strategic shifts. This comparison highlights the diverse approaches companies take in financial management, offering valuable insights for investors and industry analysts.