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Fitness financials: Champion parent refinances loans to pay off some debt, plus Forzani, Sport Chalet, Costco

Champion's parent refinanced loans to pay off some debt, Forzani’s Q3 profit jumped 71 percent, Sport Chalet was among the biggest percentage price decliners on Nasdaq, and Costco's Q1 profit was flat.

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Champion parent refinances loans to pay off some debt

Hanesbrands (NYSE: HBI), parent of Champion, said it has completed a debt refinancing that allows it more financial flexibility to consider acquisitions.

The company used the proceeds of a $500 million notes offering and funds from its $1.15 billion credit facilities to repay other debt. The company said its goal is to reduce debt by $300 million in both 2009 and 2010, which would cut interest expense by $20 million to $25 million in 2010 and 2011.

Previously, the company’s debt terms allowed it only to make acquisitions of $100 million annually, but it will now be able to target takeovers in the $200 million to $300 million range. Hanesbrands also now will be able to return cash to shareholders either through share repurchases or dividends.

The company reaffirmed it expects a 5 percent bump up in net shelf space will add $200 million to sales in 2010, independent of consumer spending trends.

Forzani’s Q3 profit jumps 71 percent

Forzani Group (TSX: FGL) reported a 71-percent rise in third-quarter profit as good weather through late September and October drove customers into its stores. Its retail banners include Sport Chek, Coast Mountain Sports, Atmosphere and Fitness Source.

But the company added that its overall fourth-quarter results would be challenging as sales in the first five weeks of the period were hindered by unseasonably warm weather across much of the country and by continuing consumer caution.

Same-store sales for the first five weeks of the fourth quarter declined 8.6 percent for corporate locations, the company said.

For the third quarter ended Nov. 1, it reported net earnings of CDN $11.4 million (USD $10.7 million), or CDN $0.37 a share (USD $0.34), compared with CDN $6.6 million (USD $6.2 million), or $0.22 cents a share (USD $0.20), a year earlier.

Revenue rose 5 percent to CDN $381.1 million (USD $359.2 million) versus CDN 362.8 million (USD $342.0 million) last year. Same-store sales rose 2.3 percent.

Gross profit was CDN $131.0 million (USD $123.5 million), up 8.3 percent from CDN $120.9 million (USD $113.9 million) a year earlier, and gross margin was 34.4 percent of revenue compared with 33.3 percent of revenue a year earlier.

The company also declared a dividend of $0.075 per Class A share, payable on Feb. 1, 2010, to shareholders of record on Jan. 18, 2010.

(Conversion of Canadian dollars into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Dec. 10.)

Sport Chalet among ‘biggest percentage price decliners’ on Nasdaq

Sport Chalet (Nasdaq: SPCHA and SPCHB) topped the list of “biggest percentage price decliners” among common stocks on the Nasdaq Stock Market on Dec. 10. Its shares dropped $0.52 to close at $1.93 on a volume of 37,600. Its 52-week range is $0.15 to $2.92.

Q1 profit flat for Costco

Costco (Nasdaq: COST) said first-quarter sales rose, but lower gas and food prices hampered its profit.

For the quarter ended Nov. 22, the company earned $266 million, or $0.60 per share, compared with $263 million, or $0.60 per share, a year earlier.

Revenue rose 6 percent to $17.3 billion and net sales grew 5.5 percent to $16.92 billion.

Same-store sales rose 3 percent — a significant improvement from the previous quarter, when the figure fell 5 percent.

–Compiled by Wendy Geister

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