Outdoor financials: Q1 retail sales up 15 percent for Forzani Group, plus Quiksilver, Dick's, Crocs
Q1 retail sales were up 15 percent for the Forzani Group, Quiksilver's Q2 profits were hit by higher costs, Dick's said it plans to triple its number of stores, and Crocs settled a patent infringement lawsuit.
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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 and Sport Chek 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.
Quiksilver’s Q2 profits hit by higher costs
Quiksilver (NYSE: ZQK), parent of Rossignol, experienced a sharp decline in second-quarter profit as higher costs outpaced revenue growth, but was still in line with analyst estimates.
The company posted net income of $3.7 million, or $0.03 per share, compared with $34.7 million, or $0.28 per share, in the prior-year period. Sales increased 21 percent to $516.9 million from $426.9 million a year ago. While the net income came in at analyst expectations, they had forecast higher revenue of $527.3 million.
By region, revenue from the company’s Americas region rose 26 percent, while Europe revenue increased 23 percent, and Asia revenue slipped 4 percent. Meanwhile, selling, general and administrative costs surged 55 percent year over year to $215.8 million.
The latest quarter’s results benefited from Rossignol and Cleveland Golf, which Quiksilver acquired in July 2005. The company said the Rossignol business “performed above expectations” in the quarter and its integration is proceeding smoothly.
Looking forward, Quiksilver backed its 2006 forecast for earnings of $0.87 to $0.88 per share, excluding $0.11 in stock compensation costs. It also reaffirmed its revenue outlook of $2.25 billion to $2.27 billion
Analysts said the company’s affirmation of earnings were a positive sign and said the results showed promise, noting that the earnings potential for the Rossignol brand has yet to be fully tapped.
Shares closed on June 9 at $12.95, up $0.95, or 7.9 percent, from the previous day.
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.
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.
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