Fitness financials: Forzani reports strong back-to-school sales, plus Nike, Town Sports, Finish Line

Forzani reported strong back-to-school sales, Nike's Q1 profit was down 13 percent, the Russell 2000 Index added Town Sports to its roster, and Finish Line's 2Q profit dropped.

Forzani reports strong back-to-school sales
For the back-to-school selling season, the Forzani Group Ltd. (TSX: FGL), Canada’s largest national retailer of sporting goods, reported retail system sales for the six-week period increased 7.0 percent over the same period last year. Without the year’s addition of The Fitness Source, retail system sales were up 5.8 percent. The company said that overall same store sales for the six-week period ended Sept. 10, 2006, increased 4.3 percent. Corporate same store sales were up 2.3 percent, with footwear sales outpacing hardgoods and apparel. Margins in all banners, which include Sport Chek, Coast Mountain Sports, Sport Mart and National Sports, continue to be stronger than in the prior year, it said. Corporate same store gross margin dollar increases outpaced the related sales improvement as they rose 6.5 percent over the prior year.

Q1 profit down 13 percent for Nike
Nike’s (NYSE: NKE) fiscal first-quarter profit took a 13-percent hit, as stock options expenses and increased marketing spending around the World Cup soccer tournament and other initiatives outpaced revenue growth.

Nike recorded net income of $377.2 million, or $1.47 per share, for the quarter ended Aug. 31, 2006, down from $432.3 million, or $1.61 per share, a year earlier. Nike’s results included a $40.8 million expense related to stock options granted to company employees, which reduced earnings per share by $0.16. Excluding the stock option expense, first-quarter net income dropped 3 percent.

Revenue grew 9 percent to $4.2 billion, compared to $3.9 billion for the same period last year. Changes in currency exchange rates increased revenue growth by 2 percentage points for the quarter.

During the first quarter, U.S. revenues increased 6 percent to $1.6 billion versus $1.5 billion for the first quarter of fiscal 2006. U.S. athletic footwear revenues increased 6 percent to $1.1 billion. Apparel revenues increased 9 percent to $431.5 million. Equipment revenues declined 1 percent to $91.3 million. U.S. pre-tax income declined 2 percent to $338.9 million.

Russell 2000 Index adds Town Sports to roster
Town Sports International’s (Nasdaq: CLUB) stock has been named to the Russell 2000 Index effective Sept. 29. Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for both passive and active investment strategies. An industry-leading $3.8 trillion in assets currently are benchmarked to them. Investment managers who oversee these funds purchase shares of member stocks according to that company’s weighting in the particular index.

Finish Line 2Q profit drops
Second-quarter profit for Finish Line (Nasdaq: FINL) plunged, as sales and costs remained mostly flat. The company earned $9.9 million, or $0.21 per share, compared with $18.9 million, or $0.38 per share, during the same period last year. Sales dropped to $338.6 million from $341.6 million. It said its back-to-school sales were below expectations, and it expects business to remain challenging through the remainder of the year. At the end of the fiscal second quarter, Finish Line operated 672 stores. The company opened two women-oriented Paiva stores during the quarter and now has six of them totaling 24,000 square feet.

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