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Fitness financials: Gaiam posts Q2 sales increase, plus Big 5, Sport Chalet, Iconix, adidas

Gaiam posted a Q2 sales increase, Big 5's earnings doublde for Q2, Sport Chalet's Q1 2010 sales dropped, Iconix said its Q2 profit was up 32 percent, and adidas saw its Q2 profit plummet 93 percent.

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Gaiam posts Q2 sales increase

Gaiam (Nasdaq: GAIA) got a 5.7-percent sales bump in the second quarter from its solar business, coupled with a solid improvement in the company’s trade domestic business, partially offset by a planned reduction in catalog circulation

Revenue for the second quarter ended June 30 increased to $60.5 million from $57.2 million recorded in the same period last year.

Net loss for the quarter was $1.0 million, or $0.04 per share, compared to net income of $2.6 million in the same period last year. Gaiam said its prior year results included a gain on the initial public offering of its solar subsidiary Real Goods Solar, partially offset by impairments of some of its media library and related assets. Excluding these items, second quarter 2008 results would have been a loss of $0.1 million.

Gross profit decreased to $31.4 million, or 52.0 percent of revenue for the second quarter of 2009, from $36.2 million, or 63.2 percent of revenue, in the comparable quarter last year. The change in gross margin reflects the company’s investment in the lower margin solar business and the implementation of media category management at retail.

Selling and operating expenses decreased $3.0 million, or 9.0 percent, to $30.7 million, from $33.7 million during the same quarter last year, reflecting cost-saving measures, including reducing payroll costs, optimizing the direct business through reduced catalog prospecting and closing non-profitable businesses.

In the second quarter, Gaiam generated free cash flow of $8.2 million, a $13.8 million improvement from cash use of $5.6 million during the same quarter of the prior year.

For the first half of 2009, the Company generated $17.1 million in cash from operations and ended the quarter with $42.8 million in cash, up $10.8 million for the six months and $4.6 million for the quarter.

During the quarter, Gaiam signed an exclusive home video license agreement with Discovery Communications, and will release programming from Discovery Communications networks, including Discovery Channel, TLC, Animal Planet, ID: Investigation Discovery, Science Channel, HD Theater, and The Military Channel.

Also, the company repurchased 932,000 shares of its common stock for $2.8 million, bringing its repurchased shares to 4.8 million. These purchases represent over 20 percent of the approximately 23 million shares currently outstanding. The company still has 2.7 million shares remaining in its authorized share repurchase program.

Big 5 earnings double for Q2

Second-quarter earnings for Big 5 Sporting Goods (Nasdaq: BGFV) more than doubled as it boosted sales and trimmed expenses.

Profit for the quarter ended June 28 rose to $4.7 million, or $0.22 per share, compared with $1.7 million, or $0.08 per share, last year. Year-ago results include 4 cents for a one-time charge.

Sales increased 3 percent to $216 million from $209 million. Same-store sales were up 0.3 percent. Selling and administrative expenses declined to $63 million from $64.4 million.

For the fiscal third quarter, Big 5 said it expects same-store sales in the flat to positive low-single-digit range. Earnings are expected between $0.27 and $0.34, up from $0.21 per share, a year ago.

Also, the company declared a quarterly cash dividend of $0.05 per share, paid on Sept. 15 to shareholders of record as of Sept. 1.

Sport Chalet Q1 ’10 sales drop, narrows loss

Sport Chalet (Nasdaq: SPCHA and SPCHB) blamed its first quarter 2010 sales decline of 8.9 percent on “continued weak macro economic conditions.”

For the quarter ended June 28, sales were $79.4 million compared to $87.1 million for the first quarter of fiscal 2009.

The company said four new stores not included in same-store sales contributed $4.0 million in sales for the quarter, while same store sales decreased 14.7 percent. Same-store sales were negatively impacted primarily by continued weak macro economic conditions.

Net loss for the first quarter of fiscal 2010 was $3.0 million, or $0.21 per diluted share, compared to a net loss of $4.5 million, or $0.32 per diluted share, for the first quarter of fiscal 2009.

The net loss for the first quarter of 2010 did not reflect any net tax benefit, while the first quarter of 2009 reflected a net tax benefit of $3.0 million, or $0.21 per share. Without the tax benefit, the company said the net loss for the first quarter of 2009 would have been $7.5 million, or $0.53 per share.

The company said it achieved EBITDA of $1.1 million compared to the minimum requirement of a negative $1.2 million EBITDA contained in the company’s current bank loan agreement. The $2.3 million achieved above the minimum EBITDA requirement in the first quarter of fiscal 2010 can be used to offset any future shortfalls during the remainder of fiscal 2010, it added.

Gross profit as a percent of sales increased to 26.4 percent from 26.1 percent last year. Selling, general and administrative expenses as a percent of sales decreased to 25.1 percent from 29.8 percent.

Iconix’s Q2 profit up 32 percent

Iconix Brand Group (Nasdaq: ICON), parent of Danskin Fitness, said its second-quarter profit rose 32 percent as sales improved and expenses fell.

Profit grew to $19.3 million, or $0.30 per share, from $14.6 million, or $0.24 per share, in the same period a year ago. Adjusted earnings were $0.33 per share in the most recent quarter, up from $0.27 per share last year.

Sales rose 9 percent to $56.4 million from $51.7 million.

Selling, general and administrative expenses declined to $17.4 million from $18.3 million.

Looking ahead, Iconix increased its 2009 revenue outlook to a range of $223 million to $230 million. Previously, the company forecast revenue between $218 million and $225 million. It maintained its earnings guidance for the year.

adidas’ Q2 profit plummets 93 percent

With currency effects and tough competition weighing on earnings, adidas (ADSG.DE) said its second-quarter net profit fell 93 percent.

Net profit in the April-June period dropped to EUR 9 million (USD $12.9 million) from EUR 116 million (USD $167 million) in the second quarter of 2008.

Sales dropped 3 percent to EUR 2.46 billion (USD $3.54 million) from EUR 2.52 billion (USD $3.62 million).

Only Latin America saw sales rise in the first half of the year. Its increase of 24 percent contrasted with an 8 percent decline in Europe, a 9 percent fall in Asia and a 10 percent drop in North America.

Operating profit for the quarter declined 66 percent to EUR 72 million (USD $103.6 million) from EUR 208 million (USD $299.5 million) a year earlier.

“The impacts of the economic downturn and repercussions on consumer spending … certainly continued to influence our performance in the second quarter,” CEO Herbert Hainer said in a statement.

“We did not see any fundamental deterioration in our business since publishing our first-quarter results,” Hainer added. “Our financials for the first half of 2009 are exactly in line with the guidance we provided in May — if not a little better. As a result, I believe we have seen the bottom in our financial performance this year.”

The company said adidas will generate positive earnings per share through the remainder of the year, but they will be below 2008 levels. It expects group sales to decline at a low to mid single-digit rate for the full 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 Aug. 5.)

–Compiled by Wendy Geister

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