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Q1 retail sales up 15 percent for Forzani Group
Canada’s Forzani Group (TSX: FGL), parent of the National Sports, Coast Mountain Sports, Sport Chek and Fitness Source retail chains, said its profit is in the black benefiting from better sales in the first quarter.
For the quarter, it earned CDN $294,000 (USD $264,118), or 1 Canadian cent a share, versus a loss of CDN $7.4 million, or 23 Canadian cents a share, for the same quarter a year earlier.
Retail sales rose 15 percent to CDN $299 million (USD $269 million) during the quarter compared to CDN $259.8 million last year, getting a boost from the company’s recent acquisition of Fitness Source Inc., as well as higher sales at existing stores. Excluding the acquisition, sales increased CDN $33.2 million (USD $29.8 million), or 12.8 percent.
Same-store sales jumped 10 percent, with corporate same-store sales up 12 percent and franchise same-store sales up 6 percent.
Revenue, consisting of corporate store sales, wholesale sales, service income, equipment rentals, franchise fees and franchise royalties, was CDN $280.4 million (USD $252 million), up CDN $42.2 million (USD $38 million), or 17.7 percent over the comparable period last year.
Gross margin for the quarter was 32 percent of revenue, compared with 29 percent in the same period a year earlier.
During the quarter, the company opened one Sport Chek store, acquired nine Fitness Source stores and closed five Sport Mart stores, one Sport Chek store, and one corporately owned franchise location. In the franchise division, eight stores were opened (six Nevada Bob’s Golf, one Hockey Experts and one Atmosphere), and four stores were closed (three Intersport and one Nevada Bob’s Golf). It now has 263 corporate stores and 208 franchise locations.
Dick’s plans to triple number of stores
During its annual shareholders meeting on June 8, Dick’s Sporting Goods (NYSE: DKS) said it plans to more than triple its number of stores within eight years. CEO Edward Stack said the company plans to grow at about 15 percent (store growth) each year, with the goal of 800 stores total in eight years. Presently, the company has 263 stores in 34 states. It opened 26 stores in 14 states last year, and opened stores in major markets such as Chicago, Boston and Washington, D.C., in the first quarter of this year.
Life Time Fitness shares rise on analyst recommendation
Life Time Fitness (NYSE: LTM) saw its shares rise more than 6 percent in afternoon trading on June 7 after an analyst said a recent pullback in price has made the stock an attractive buying opportunity.
The company’s shares gained $2.55 to $44.54 in afternoon trading on the New York Stock Exchange. It closed the day’s trading at $44.38. The company’s shares have traded as low as $28.90 and as high as $48.92 in the past year.
Over the past month, the shares had retreated roughly 14 percent, and UBS Investment Research attributed the decline to macroeconomic factors affecting other retailers, such as interest rates and fuel prices. It added, though, that Life Time doesn’t have the same exposure to the economy as other retailers, maintaining its “Buy” rating and a $58 price target on the shares.
Crocs settles patent infringement lawsuit
Crocs (Nasdaq: CROX) said it settled a patent infringement lawsuit against footwear maker Acme EX-IM Inc. for an undisclosed sum. The lawsuit was resolved with the entry of a consent judgment finding infringement by Acme EX-IM’s “Pali Clogs,” and that Crocs’ patents are valid. As part of the settlement, Acme EX-IM has agreed to not infringe Crocs’ patents and trade dress in the future, and Crocs has released Acme EX-IM and its customers of any past liability, according to Crocs.
Town Sports to redeem portion of outstanding debt securities
Town Sports International (Nasdaq: CLUB) has issued a notice of redemption for 35 percent of the aggregate original principal amount — about $43.6 million — of its outstanding 11 percent Senior Discount Notes due 2014. It is doing so at a redemption price equal to 111 percent of the accreted value at the redemption date of the notes being redeemed, plus accrued and unpaid interest.
The company is using a portion of the cash proceeds from its initial public equity offering to redeem the notes. The notes will be redeemed on July 7, 2006. The aggregate accreted value of the notes being redeemed at the 111 percent redemption price totals $62.8 million.
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