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Forzani reports 5-percent increase in Q1 revenue
Forzani Group (FGL.TO), Canada’s largest sporting goods retailer, reported a higher first-quarter profit fueled by a 5-percent rise in revenue. Its banners include Sport Chek, Sports Experts and Coast Mountain Sports.
It earned CDN $739,000 (USD $698,100), or 2 Canadian cents a share, for the period ended April 29, up from CDN $294,000, or 1 Canadian cent, in the same quarter a year earlier.
It said the 2007 results included a one-time loss of CDN $900,000 (USD $849,987) on the sale of an investment in a trademark licensing company. Excluding this, Forzani earned CDN $1.3 million (USD $1.2 million) or 4 Canadian cents a share.
Forzani said total revenue for the quarter, which includes corporate store sales, wholesale sales, service income, equipment rentals, franchise fees and franchise royalties was CDN $294.6 million (USD $278.2 million), up from CDN $280.4 million for the same time last year.
Same-store sales in corporate locations rose 0.4 percent in the quarter, while same store sales for franchises were up 9.6 percent.
Additionally, the company stated in its annual report, also released this week, that it would in the coming fiscal year start franchising Fitness Source and roll out a new store concept this year “unlike any we have seen anywhere.”
Since early 2006 Forzani has owned Canada specialty fitness retailer Fitness Source.
(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 June 5.)
Sport Chalet Q4 profit cut in half by dry winter
One of the driest winters on record in Southern California — as well as in Nevada and Arizona — led to a 50 percent drop in fourth-quarter profits for Sport Chalet (Nasdaq: SPCHA and SPCHB).
Net income declined to $881,000, or $0.06 per diluted share, compared to $1.6 million, or $0.12 per diluted share, for the fourth quarter last year.
“While we made solid progress towards our long-term goals during the fourth quarter, our results did not meet our expectations following our record third quarter,” Craig Levra, chairman and CEO, said in a statement. “Unlike last year’s particularly strong late snowfall, we experienced exceptionally dry weather in California, Nevada and Arizona which impacted sales of winter apparel and equipment. However, we did generate positive growth within our non-winter products and are seeing earlier and improved sales of warm-weather merchandise.”
For the fourth quarter, sales increased 9.1 percent to $97.8 million from $89.7 million in the fourth quarter last year, which included sales from five stores opened in fiscal 2007 and one store opened in the fourth quarter of fiscal 2006 contributing $8 million.
Comparable store sales decreased 1.0 percent. The company, though, said this was more than offset by $1.3 million in additional sales from one extra day being reflected in our 2007 results. Excluding winter-related products, comparable store sales increased 2.5 percent.
Gross profit as a percent of sales decreased to 29.3 percent from 30.2 percent in the fourth quarter of last year. The 90 basis point decrease was primarily due to increased occupancy expense as a percent of sales in new stores, as they require time to reach operating efficiency. Selling, general and administrative expenses as a percent of sales increased to 27.7 percent from 27.0 percent last year, again primarily due to the impact of new stores.
Sales for fiscal year 2007 increased 13.1 percent to $388.2 million from $343.2 million from the prior year. Comparable store sales increased 2.0 percent for the year on top of the prior year’s 1.9 percent gain. Excluding winter-related products, comparable store sales increased 2.1 percent.
Net income for fiscal 2007 was $7.1 million, or $0.50 per diluted share, compared to a net loss in fiscal 2006 of $87,000, or $0.01 per diluted share, including an after-tax charge of $7.8 million, or $0.56 per diluted share. Excluding that, net income in fiscal 2006 was $7.8 million, or $0.55 per diluted share.
Five new stores were opened in fiscal 2007, compared to four new store openings in fiscal 2006.
Everlast-Hidary deal has breakup fee of up to $4.5 million
Everlast Worldwide (Nasdaq: EVST) said it would be required to pay Hidary Group a $3 million termination fee under certain circumstances if it ends a merger agreement between the companies during the current “go shop” period.
Everlast added that if the agreement is ended after the period ends, it could be liable for a $4.5 million termination fee to Hidary.
According to a SEC filing, the merger agreement contains a provision giving Everlast 30 days, through July 1, to “solicit additional interest in a transaction.”
The company said it had agreed to be acquired by Hidary for more than $146 million, or $26.50 a share, in cash. Hidary, a New York-based investment group, has a license to design and sell men’s activewear under the Everlast label.
In other company news: Everlast has signed a worldwide license deal with tire maker Michelin to create a new line of boxing shoes using tread technology inspired by the Michelin HydroEdge tire. Financial terms were not disclosed. Everlast plans to launch the new shoe line next spring.
Under Armour expanding to Europe markets
Under Armour (NYSE: UA) has signed an agreement with a European distributor to sell products in Belgium, the Netherlands and Luxembourg.
Netherlands-based distributor Unlimited Sports Group will assist Under Armour in its goal of becoming an international company and increasing its global business, especially among European consumers.
The company’s European headquarters is in Amsterdam.
Dick’s adds two board members
Brian J. Dunn and Larry D. Stone have been elected to the board of directors of Dick’s Sporting Goods (NYSE: DKS). Dunn currently serves as president and chief operating officer of Best Buy Co. and has worked there for 22 years. Stone is president and chief operating officer at Lowe’s Companies and is a 37-year Lowe’s veteran.
Finish Line same-store sales for Q1 decline
First-quarter same-store sales for Finish Line (Nasdaq; FINL) dropped 3.9 percent. Finish Line same-store sales slipped 4.1 percent, while Man Alive same-store sales rose 0.6 percent.
Total sales for the 13-week period ended June 2 dipped 0.2 percent to $288.3 million from $289 million a year ago.
The company said it expects a first-quarter loss in the range of 9 cents per share to 11 cents per share, compared with a profit of 9 cents per share in the prior-year period.
Sports Direct’s holding in Amer Sports exceeds 5 percent
Amer Sports Corp. said it was notified by the Finnish Securities Market that the total number of shares held by Sports Direct International Plc represents 5.4 percent of the company’s share capital and voting rights. Amer Sports capital consists of 72,091,194 shares in issue.
Wal-Mart sees modest rise in May same-store sales
Wal-Mart Stores said same-store sales rose 1.1 percent in May, as higher Sam’s Club same-store sales offset a nearly flat month at Wal-Mart. In the four-week period ending June 1, Sam’s Club same-store sales rose 5.4 percent, while Wal-Mart stores edged up 0.3 percent.
Net sales for the four weeks ended June 1 grew 7.7 percent to $28.26 billion, from $26.23 billion last year. Wal-Mart Stores sales grew 6 percent to $18.07 billion, Sam’s Club sales grew 8.1 percent to $3.55 billion and international sales grew 14.2 percent to $6.64 billion.
Wal-Mart said it expects June same-store sales will be between flat and 2 percent higher.
Costco reports May sales
For the month of May, Costco reported same-store sales grew 7 percent. Total sales for the four-week period ended June 3 climbed 11 percent to $5.14 billion from $4.63 billion in the prior year.
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