Fitness financials: Town Sports posts wider Loss for Q1, plus Big 5, Crocs, Sears, Under Armour, Puma, Iconix

Town Sports posts wider loss for Q1
Town Sports International Holdings (Nasdaq: CLUB) said its first-quarter loss widened due to a loss on the payment of debt.

The quarterly loss increased to $3.8 million, or $0.15 per share, from $135,000, or $0.01 per share, a year earlier. The most recent quarter includes a loss of $12.5 million on the extinguishment of debt.

Revenue rose 11 percent to $115.4 million from $104 million, with same-club revenue up 7.8 percent, driven by increased membership and ancillary revenue.

Membership revenue grew 10.3 percent to $93.9 million from $85.1 million in 2006. Ancillary club revenue was up 14.7 percent to $20.5 million from 2006’s $17.9 million. Total operating expenses increased by 10 percent to $103.0 million in compared to $93.6 million in 2006.

For the full year, the company said it expects net income of $13.7 million to $14.7 million, or 51 cents to 55 cents per share, including a charge on the extinguishment of debt. Excluding the item, earnings per share are pegged at 79 cents to 83 cents per share.

The company still expects revenue of $475 million to $480 million, up 10 to 11 percent from 2006, and it expects to open about 15 new clubs this year.

The company operates 149 domestic clubs, and anticipates opening 15 new clubs in 2007.

Big 5 earnings rise 28 percent
Big 5 Sporting Goods (Nasdaq: BGFV) credits higher margins on its winter apparel for a 28-percent increase in its first-quarter profit.

The company said quarterly earnings increased to $7.6 million, or $0.33 per share, from $5.9 million, or $0.26 per share during the same period last year. Revenue grew 5 percent to $217 million from $207.2 million. Quarterly same-store sales rose 1 percent.

Big 5 Chairman and CEO Steven Miller placed much of the company’s quarterly gain on wider profit margins, which extended to 36 percent from 35.4 percent a year ago.

“Product margins benefited from strong sales of winter-related products early in the quarter, when margins are highest, compared to last year, when we realized very strong winter product sales late in the quarter,” Miller said in a statement.

The company also reaffirmed earnings this year of between $1.47 per share and $1.57 per share, but added that lower-than-anticipated sales beginning in the second half of April and higher administrative expenses would result in a second-quarter profit of between $0.25 per share and $0.33 per share. It still anticipates quarterly same-store sales growth in the low single-digit range.

Separately, the company declared a regular quarterly dividend of $0.09 per share. It will pay the dividend on June 15 to shareholders of record on June 1.

Crocs Q1 net income up nearly fourfold
First-quarter net income for Crocs (Nasdaq: CROX) nearly quadrupled, fueled by strong domestic and international sales.

Net income attributable to common shareholders rose to $24.9 million, or $0.61 per share, from $6.4 million, or $0.17 per share during the same period a year ago. Revenue tripled to $142 million, from $44.8 million a year ago.

Analysts expected net income of $0.49 on revenue of $113.9 million.

The company said domestically, sales of its new spring/summer collection and licensed and Jibbitz business helped results. Internationally, classic models are selling well.

It raised its fiscal 2007 earnings guidance, saying it anticipates yearly earnings of $2.90 to $2.95 per share on sales of $670 million to $680 million. Previously, the company expected revenue and earnings to grow 45 percent, implying full-year earnings per share of $2.33 per share and sales of $514.3 million. Also, it predicts second-quarter profit of 80 cents to 85 cents per share on revenue of $180 million to $190 million.

Separately, Crocs declared a 2-for-1 stock split as a stock dividend. Shareholders of record May 31 will get an additional share for each they hold on June 14.

Sears says same-store sales down in Q1, anticipates earnings increase
Sears Holdings Corp. (Nasdaq: SHLD) said same-store sales declined in the first quarter but it expects quarterly earnings to be up.

It reported that Kmart same-store sales were down 4.7 percent for the first 12 weeks of the 13-week first quarter, primarily due to lower transaction volumes in a majority of stores. Sears U.S. same-store sales declined by 2.4 percent, primarily reflecting a reduction in home appliances sales.

The company anticipates first-quarter net income between $200 million and $235 million, or $1.30 and $1.53 per share. In the fiscal first quarter of fiscal 2006, the company reported net income of $180 million, or $1.14 per share.

First-quarter income expectations include $42 million, or $0.27 per share, in one-time gains, the company said, including income from a legal settlement and employee benefit plan change, and a dividend received by the company from Sears Mexico.

Under Armour Q1 net income rises
Under Armour’s (NYSE: UA) first-quarter net income rose 14 percent, helped by sales of expanded baseball and golf apparel.

Quarterly earnings totaled $9.9 million, or $0.20 per share, from $8.7 million, or $0.18 per share during the prior-year quarter. Revenue rose 42 percent to $124.3 million, or $87.7 million a year ago.

It said results were helped by higher average selling prices and by growth in apparel revenue, including sales of expanded lines of baseball and golf apparel. Sales of footwear, not offered in the year ago quarter, also helped revenue.

Because of higher marketing expenses, Under Armour said it expects net income in the quarter to be 2 cents or 3 cents per share, while analysts are looking for a profit of 7 cents per share.

For the full year the company affirmed guidance of income from operations between $74.5 million and $77.5 million, on revenue between $560 million and $580 million, an increase of 30 percent to 35 percent over the 2006 level. Analysts are looking for revenue of $584.30 million.

Puma posts 3.8 percent rise in net profit
First-quarter net profit rose 3.8 percent for Puma — EUR 96.6 million (USD $131.35 million) from EUR 93.1 million a year earlier.

Revenue rose 2 percent to EUR 655.8 million (USD $891.6 million) from EUR 642.8 million.

Currency-adjusted consolidated orders rose 1.4 percent to EUR 1.06 billion (USD $1.44 billion). First-quarter orders in the U.S. declined 18 percent, due to a generally moderate environment in the mall business, but also due to a business-related adjustment with one key account that had seen a high sales increase in the prior years, Puma said.

Currency-adjusted orders in the European, Middle East and Africa region advanced 0.8 percent in the first three months of 2007, but declined 0.8 percent in euro terms. Currency-adjusted orders were up 20 percent in the Asia-Pacific region, but the region’s share in the company’s overall sales contribution declined to 18 percent this time around from 19 percent a year earlier.

Puma said it sees sales and earnings growth in the low single-digits. Previously the company said it expects net profit to grow at least 10 percent and sales to grow at a mid-to-high single digit rate.

It said second-quarter order backlog should decline on the year while order backlog for the third quarter of 2007 will slightly increase from the year-earlier figure. The third quarter is usually the company’s strongest in terms of orders, it said.

PPR S.A. purchased 27 percent of Puma in April and will launch its takeover offer for Puma on May 15. The company expects to integrate the new business into its accounts in the second half of 2007.

(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 May 7.)

Danskin Fitness-parent Iconix reports record Q1 earnings
Iconix Brand Group (Nasdaq: ICON), new parent of Danskin, saw its licensing revenue more than double for the first quarter.

Licensing revenue for the first quarter of 2007 increased to $30.8 million compared to $13.3 million in the first quarter of 2006. EBITDA for the quarter increased to $23.3 million versus $8.4 million in the prior year quarter. It added that free cash flow for the quarter increased to $21.6 million as compared to $6.1 million in the prior year quarter.

Net income was $12.7 million versus $7.4 million in 2006 and fully diluted earnings per share as reported was $0.21 versus $0.18.

The company reaffirmed its previously stated 2007 guidance of revenue in a range of $150 million to $160 million and fully diluted earnings per share in a range of $0.96 to $1.

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