Fitness financials: Accell Group's '07 fitness segment sales status quo, plus Town Sports, Big 5, Puma, Finish Line, Sears, Under Armour
Fitness financials, Accell Group's fitness segment FY '07 sales status quo. Town Sports' Q4 revenue up 7.9 percent. Big 5 Q4 profit impacted negatively by retail environment. Puma's Q4 profit up 17 percent. Genesco agrees to settle with Finish Line, UBS over disputed takeover deal. Sears Holdings profit plunges 47.5 percent. Under Armour appoints CFO, COO.
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Accell Group’s fitness segment FY ’07 sales status quo
Accell Group N.V., parent of Tunturi, Bremshey and BS&T based in The Netherlands, reported FY ’07 sales of EUR 476.1 million (USD $707.1 million) — a 10.3 percent increase over 2006.
Net profit from ordinary operations increased 33 percent to EUR 24.4 million (USD $36.2 million), which the company attributed primarily to increased sales and an improved product mix. Earnings per share were up 30 percent at EUR 2.60 (USD $3.86), compared with EUR 2 (USD $2.97) in 2006.
The company said sales for its fitness segment remained virtually unchanged at EUR 45.0 million (USD $66.8 million) in 2007 from EUR 45.7 million (USD $67.8 million) in 2006. The company said after a disappointing first half of the year, due to the “exceptional” weather, the third quarter also proved weak. It said sales improved in the fourth quarter through the introduction of new and innovative products. The result from the fitness segment dropped to EUR 800,000 (USD $1.1 million) from EUR 2.0 million (USD $2.9 million) in 2006.
After a strong 2006, Accell Group said the company took further steps in 2007 in organizing the international fitness division to strengthen it. The German sales organization was moved to Almere, Netherlands, in 2007 and preparations have been made to relocate sales to Austria and Switzerland. Started in 2006, the relocation of the fitness equipment production in Finland to the new production facility in Estonia, a joint venture with a local partner was completed last year.
(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Feb. 27.)
Town Sports’ Q4 revenue up 7.9 percent
Town Sports International Holdings (Nasdaq: CLUB) reported quarterly earnings that were better than expected with membership and ancillary club fees both posting gains in the fourth quarter.
Revenue rose 7.9 percent year over year to $118.9 million from $110.2 million for Q4 2006. Comparable club revenue increased 3.2 percent for Q4 2007. Of this increase, 1.8 percent was due to an increase in membership, 1.0 percent was due to an increase in price and 0.4 percent was due to an increase in ancillary club revenue and fees and other revenue.
Operating expenses swelled 7.7 percent over the same time — to $103.7 million for Q4 2007 compared to $96.4 million for Q4 2006 — and the company set aside $3.3 million for income taxes, up fourfold from the prior year.
The company added that its fourth-quarter net income slipped 10 percent to $6 million, or $0.23 per share, from $6.6 million, or $0.25 per share, in the 2006 quarter. Excluding favorable tax adjustments, income totaled $0.21 per share.
In a client note to investors, Scott Hamann of Keybanc Capital Markets maintained a “Buy” rating on the stock based on the earnings report. “We believe 4Q07 results were solid and largely ahead of investor expectations. After seeing sequential declines in membership growth over the past several quarters, memberships reaccelerated during 4Q07 (+7.3).”
For the full year, total revenue increased 9.2 percent to $472.9 million from $433.1 million in 2006. Comparable club revenue increased 5.2 percent for the year. Net income for 2007 was $13.6 million compared to $4.6 million for 2006.
For 2008, Town Sports said it expects revenue growth of 8 percent to 10 percent to a range of $510 million to $520 million. Net income is targeted at $21.3 million to $22.3 million, or $0.80 to $0.84 per share.
Big 5 Q4 profit impacted negatively by retail environment
Big 5 Sporting Goods (Nasdaq: BGFV) said fiscal fourth-quarter net income dropped 36 percent, partly impacted by lower customer traffic.
Quarterly profit fell to $6.2 million, or $0.28 per share, from $9.6 million, or $0.42 per share, in the prior-year quarter.
Revenue fell 1 percent to $232.1 million from $234.5 million last year, hurt by lower traffic amid a difficult consumer environment, as well as lower demand for wheeled shoes. Same-store sales fell 4.7 percent.
For the year, profit fell 9 percent to $28.1 million, or $1.25 per share from $30.8 million, or $1.35 per share last year. Revenue rose 3 percent to $898.3 million from $876.8 million a year ago.
“Like many other retailers, we experienced weak consumer spending during the holiday selling season,” Steven Miller, company chairman, president and CEO, said in a statement.
The company expects earnings of $0.17 to $0.23 per share in the first quarter and $0.75 to $1 per share during fiscal 2008. It also anticipates same-store sales to fall in the low- to mid-single digits in the first quarter and the year.
Puma’s Q4 profit up 17 percent
Puma’s fourth-quarter profit rose 17 percent boosted by improved sales. The increase came as the company opened more of its own branded stores and demand for its apparel rose across its markets in Europe, the Middle East, Africa and Asia, but dipped in the Americas.
Puma earned EUR 38.3 million (USD $56.7 million) in the October-December period, up from EUR 32.8 million (USD $48.6 million) a year earlier. Sales rose 5 percent to EUR 504.5 million (USD $747.5 million). Puma said growth was strongest in Europe, the Middle East and Africa, where it sponsors several soccer teams. Sales rose by 19.9 percent from the fourth quarter of 2006 and were up 14.3 percent in Asia. But in the Americas, sales slipped 3.3 percent, which it anticipated because of strong competition from Nike, adidas and Reebok.
For the year, the company earned EUR 269 million (USD $398.6 million), up 2.2 percent from EUR 263.2 million (USD $390.1 million) in 2006, while sales showed a moderate rise to EUR 2.37 billion (USD $3.51 billion) from EUR 2.36 billion (USD $3.49 billion) a year earlier.
Puma CEO Jochen Zeitz said in a statement, “Although Puma faced a challenging year, we did not only meet most of our expectations in 2007, but even exceeded them in many points.”
French luxury goods company PPR took over Puma last year, acquiring more than 62 percent of the company’s shares, but Puma continues to report separately and keep its stock market listing.
(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Feb. 26.)
Genesco agrees to settle with Finish Line, UBS over disputed takeover deal
Genesco has agreed to settle with Finish Line (Nasdaq: FINL) and UBS over a disputed $1.5 billion buyout plan. Finish Line and UBS had been trying to get out of the deal they offered in June, claiming that Genesco was not forthcoming about its financial situation.
The proposed settlement would terminate the deal and require UBS and Finish Line to pay Genesco $175 million in cash and 12 percent of Finish Line’s outstanding common stock. The settlement must be approved by the boards of all companies involved.
The companies reported that they were requesting a one-day delay of a trial that was scheduled to begin in New York.
Sears Holdings profit plunges 47.5 percent
Sears Holdings (Nasdaq: SHLD) reported a 47.5 percent decline in fourth-quarter profit as sales continued to fall at its Kmart and Sears stores and it marked down prices.
Earnings fell to $426 million, or $3.17 a diluted share, in the fourth quarter ended on Feb. 2, from $811 million, or $5.27 a share, a year earlier. Excluding a gain tied to asset sales, profit came to $3.04 a share.
Revenue fell about 7 percent to $15.07 billion versus $16.2 billion the year before. Same-store sales were 4.5 percent companywide in the fourth period, with declines of 4 percent at U.S. Sears stores and 5.2 percent at Kmart.
The fourth quarter marked the third straight quarterly profit decline for Sears, and sales at stores open at least a year have fallen for the past two years.
For the fiscal year ended Feb. 2, 2008, net income was $826 million, or $5.70 per diluted share, compared with net income of $1.5 billion, or $9.58 per diluted share, for the fiscal year ended Feb. 3, 2007.
FY ’07 revenues were $50.7 billion compared to $53.0 billion in fiscal 2006 — hurt primarily by lower same-store sales. Same-store sales declined 4.3 percent with Sears stores down 4 percent and Kmart stores down 4.7 percent.
Under Armour appoints CFO, COO
Under Armour (NYSE: UA) promoted Vice President of Accounting and Finance Brad Dickerson to chief financial officer, succeeding Wayne Marino who will become chief operating officer.
The chief operating position is newly created. Marino will head up the company’s operational, financial, administrative and strategic planning functions. He has served as executive vice president and CFO since March 2006.
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