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Forzani reports record Q4 earnings
Forzani Group (TSX: FGL), Canada’s largest sporting goods retailer, said fourth-quarter profit rose 36 percent, helped by an additional week of sales, lower taxes and a cold winter. Its retail banners include Sport Chek, Sports Experts and Coast Mountain Sports.
Forzani said fourth-quarter earnings were a record CDN $28.7 million (USD $28.2 million), or CDN $0.85 (USD $0.83) a share, in the three months ended Feb. 3. That is up from a net profit of CDN $21.1 million (USD $20.7 million), or CDN $0.62 (USD $0.61) a share, in the year-before period.
The company said lower corporate income tax rates added CDN $2.2 million (USD $2.1 million), or CDN $0.06 (USD $0.05) a share, to earnings.
Revenue rose about 16 percent to CDN $410.6 million (USD $404.2 million). Same-store sales increased 10.6 percent in corporate stores and 17.7 percent in franchise locations.
Gross margin slipped to 40 percent of revenue from 41.2 percent, reflecting “aggressive pricing” to offset a stronger Canadian dollar.
Net earnings for the year were CDN $47.5 million (USD $46.7 million), or CDN $1.40 per share (USD $1.37) compared to CDN $35.2 million (USD $34.6 million) and CDN $1.06 per share (USD $1.04) in the prior year — a 34.9-percent increase in profits and a 32.1-percent increase in earnings per share.
Revenue for the full year ’07 was CDN 1.33 billion (USD $1.30 billion) compared to CDN 1.26 billion (USD $1.24 billion) the previous year.
For the first eight weeks of the first quarter, Forzani said same-store sales from corporate stores were down 8.0 percent and franchise same-store sales decreased 4.3 percent for an overall retail system sales decline of 6.6 percent. It said continuing winter weather across the country hampered sales of spring products. Corporate margins rose versus prior year as a result of cleaner winter inventories.
The company noted that it’s planning a series of moves to bolster sales and margins this year. It will spend about CDN $30 million (USD $29.5 million) to open 38 new stores and renovate another 12 to 14.
Forzani said it would also test new types of retail offerings. It has opened three S3 stores, which sell snow, skate and surf gear, and plans to open two more this year and accelerate that pace in 2009.
Forzani had 344 corporate stores and 223 franchise locations at the end of the quarter, an 18 percent jump from the total of 479 stores it had at yearend 2007.
(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 April 10.)
Sport Chalet names chief merchandising officer
Sport Chalet (Nasdaq: SPCHA and SPCHB) has appointed Tom Tennyson to the newly created position of executive vice president-chief merchandising officer. He will be responsible for all merchandising and marketing initiatives as well as in-store merchandise presentation for Sport Chalet.
Most recently, Tennyson served as senior vice president, general merchandising manager at Mervyns Department Stores, where he was involved with merchandising and marketing as well as logistics and systems. He’s also worked for Galyan’s Trading Company, Dick’s Sporting Goods and Kohl’s Department Stores.
Wal-Mart reports March sales, raises Q1 profit guidance
Wal-Mart (NYSE: WMT) posted a 0.7 percent increase in same-store sales, excluding fuel, for the month of March. Same-store sales rose 0.9 percent at Wal-Mart stores and fell 0.7 percent at Sam’s Club stores.
For the five weeks ended April 4, total sales rose 8 percent to $36.97 billion from $34.26 billion last year.
The company expects April same-store sales, excluding fuel, to rise 1 percent to 3 percent. Previously Wal-Mart said April sales could be flat to up 2 percent.
Wal-Mart also said it now expects earnings of $0.74 to $0.76 per share for the first quarter, up from $0.70 to $0.74 per share predicted earlier.
Costco’s March same-store sales up 7 percent
Costco (Nasdaq: COST) said its March same-store sales rose 7 percent. Total sales for the five weeks ended April 6 climbed 11 percent to $6.57 billion from $5.93 billion in the same five-week period last year
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