{"id":985050,"date":"2026-07-27T10:03:10","date_gmt":"2026-07-27T14:03:10","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/the-hackett-group-finds-sga-costs-reach-five-year-highs-across-north-america-and-europe\/"},"modified":"2026-07-27T10:03:10","modified_gmt":"2026-07-27T14:03:10","slug":"the-hackett-group-finds-sga-costs-reach-five-year-highs-across-north-america-and-europe","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/the-hackett-group-finds-sga-costs-reach-five-year-highs-across-north-america-and-europe\/","title":{"rendered":"The Hackett Group\u00ae Finds SG&A Costs Reach Five-Year Highs Across North America and Europe"},"content":{"rendered":"

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The Hackett Group\u00ae<\/sup> Finds SG&A Costs Reach Five-Year Highs Across North America and Europe<\/p>\n

New research shows the next generation of profitable growth will be driven by AI-enabled operating models<\/p>\n

MIAMI–(BUSINESS WIRE<\/a>)–The Hackett Group, Inc.<\/a> (NASDAQ: HCKT), an ROI-led AI transformation<\/a> firm, today announced findings from both its North America and European 2026 SG&A Cost Study and Scorecard, revealing that the next generation of profitable growth will be driven less by economic conditions and more by AI-enabled operating models<\/a>. The average costs of selling, general and administrative (SG&A) functions climbed to their highest levels in five years across both regions, exposing a widening gap between organizations that are improving productivity through artificial intelligence (AI) and those relying on traditional cost-management approaches. This was against a background of stronger revenue growth and moderating inflation.<\/p>\n

This press release features multimedia. View the full release here: https:\/\/www.businesswire.com\/news\/home\/20260727403902\/en\/<\/a><\/p>\n

\"The<\/p>\n

The Hackett Group\u00ae compared fiscal year 2025 and fiscal year 2024 financial performance of the
\n1,000 largest nonfinancial services companies in Europe to identify the degree to which organizations are optimizing SG&A costs. The analysis segmented companies into four groups based on their year-on-year cost changes: “cost cutters,” “inflation beaters,” “ratio managers,” and “cost growers.”<\/p>\n

Both North American and European companies experienced year-over-year revenue growth and were helped by a dip in the rate of inflation, yet most companies are still “cost growers,” meaning their SG&A costs as a percentage of revenue increased.<\/p>\n<\/div>\n

Among the 1,000 largest publicly traded companies analyzed in each region, median SG&A costs<\/a> rose to 16.2% of revenue in North America and 13.4% in Europe. Revenue growth accelerated to 4.4% in North America and 6.5% in Europe during 2025, yet many organizations continued to struggle to translate growth into sustainable operating leverage.<\/p>\n

While fewer organizations experienced worsening SG&A performance than the previous year, much of the improvement reflected stronger revenue growth rather than fundamental gains in productivity. In North America, the share of companies whose SG&A costs grew faster than revenue declined from 62.0% to 51.6%, while in Europe it fell from 62.5% to 53.6%. The findings show that relatively few organizations have fundamentally improved the productivity and scalability of their operating models.<\/p>\n

\u201cEconomic recovery improved financial results, but it didn\u2019t fundamentally change how organizations operate,\u201d said Thomas Kellaway, principal at The Hackett Group\u00ae<\/sup>. \u201cThe next generation of profitable growth will come from AI-enabled operating models that increase productivity, scale more efficiently and strengthen operating leverage.\u201d<\/p>\n

A widening operational leverage gap<\/b><\/p>\n

The gap between leading organizations and median companies continued to widen across both regions. In North America, first-quartile companies operated with SG&A costs equal to 7.8% of revenue, compared to 16.2% for the median \u2013 an 8.4-percentage-point advantage between first-quartile and median companies. In Europe, first-quartile companies reported SG&A costs of 6.1% of revenue versus 13.4% for the median \u2013 a 7.3-percentage-point advantage.<\/p>\n

The research also highlights a growing scalability challenge. Many companies generated only a narrow margin between revenue growth and SG&A cost growth, leaving them increasingly vulnerable if market conditions weaken. The widening gap between leading and median performance suggests that relatively few organizations have built the productivity and scalability needed to create sustainable operating leverage through AI-enabled operating models.<\/p>\n

AI is reshaping SG&A economics<\/b><\/p>\n

When embedded into core business processes, AI is helping organizations improve productivity, scale more efficiently, and create structural SG&A cost advantages. For a typical $10 billion company, achieving Digital World Class\u00ae<\/sup> performance across SG&A functions represents approximately $286 million in annual cost advantage. Across finance, human resources, information technology and procurement alone, the potential annual cost advantage approaches $85 million.<\/p>\n

Leading organizations are investing accordingly. Digital World Class\u00ae<\/sup><\/a> technology organizations allocate three times more of their technology spending to AI, intelligent automation<\/a> and other emerging technologies than their peers, creating the productivity and scalability advantages that drive long-term operating leverage.<\/p>\n

The Hackett Group\u00ae<\/sup> expects the performance gap between AI World Class organizations and typical companies to widen by up to 75% in the near term as leaders embed AI into core business processes.<\/p>\n

How AI is transforming SG&A performance<\/b><\/p>\n

The research highlights several examples of how AI, Gen AI<\/a> and agentic AI<\/a> are already transforming critical SG&A processes, including:<\/p>\n