Forzani Q3 profit up 83.1 percent
The Forzani Group Ltd. (TSX: FGL), Canada’s largest retailer of sporting goods, reported an 83.1 percent increase in third-quarter profits after experiencing robust sales.
The company, whose banners include Sport Chek, Coast Mountain Sports, Sport Mart and National Sports, said it earned CDN $11.9 million (USD $10.3 million), or 35 Canadian cents a share during the quarter, up from a profit of CDN $6.5 million, or 20 Canadian cents, in the same quarter a year earlier. On average, analysts had expected the company to earn 28 Canadian cents a share.
Total retail sales for the quarter rose 10.4 percent to CDN $339.5 million (USD $295.4 million) from CDN $307.6 million, boosted in part by the recent acquisition of The Fitness Source. Exclusive of the acquisition of Fitness Source, retail system sales increased CDN $27.0 million (USD $23.5 million), or 8.8 percent.
Same store sales in corporate locations were up 6.6 percent and increased 9.9 percent in franchise locations, for an overall same store sales increase of 7.7 percent. This versus a 4.7 percent overall increase in the third quarter of fiscal 2006, continuing the current year trend of strong quarterly, year over year same store sales increases.
Revenue, consisting of corporate store sales, wholesale sales, service income, equipment rentals, franchise fees and franchise royalties, was CDN $346.3 million (USD $301.4 million), up CDN $40.9 million, or 13.4 percent over the comparable period last year.
Gross margin was 34.5 percent of revenue, or CDN $119.4 million (USD $103.9 million), compared with 33.1 percent, or CDN $101.1 million, in the previous year.
Store operating expenses, as a percent of corporate store revenue, were 25.6 percent against the prior year of 26.9 percent. Same-store operating costs were 24.5 percent of corporate store revenue, 25.5 percent in the prior year. Same-store costs, in absolute dollars, increased CDN $1.3 million (USD $1.1 million), or 2.6 percent. The overall store operating expense increase reflects the acquisition of nine Fitness Source stores.
General and administrative expenses were 8.5 percent of total revenue versus the prior year’s 7.5 percent. The rate increase, and absolute dollar increase of CDN $6.6 million (USD $5.7 million), was attributable to the addition of the Fitness Source infrastructure and accruals for anticipated, year-end, performance-based compensation.
Earnings before interest, taxes and amortization (“EBITA”) were CDN $31.4 million (USD $27.3 million), or 9.1 percent of revenues, compared to CDN $21.7 million, or 7.1 percent of revenues, for the 13-week period last year.
(Conversion of Canadian dollars into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Dec. 8.)
VF shares rise on positive analyst feedback
On Dec. 6, Citigroup initiated coverage of VF Corp. (NYSE: VFC) with a buy rating and a $90 price target, giving its stock a boost.
VF, whose brands include The North Face, JanSport and Eastpak, among others, closed at $79.26, up $0.47 from the day before. Adjusted for splits, the stock is higher than it’s been in more than 20 years.
Wolverine receives $5.2 million defense pact
The Defense Logistcs Agency said it awarded a contract worth $5.2 million to Wolverine World Wide (NYSE: WWW). The pact will provide the Army and Marine Corps with men’s synthetic “breathable” leather shoes. Work will be completed by March 16, 2008.
Coleman names new VPs
Coleman, which is a wholly owned subsidiary of Jarden Corp. (NYSE: JAH), has elevated three staff members to senior vice president positions.
Pat Barnett, a 20-year veteran of Coleman, was promoted to senior vice president of global product management. He is in charge of directing Coleman’s product lines.
Bob Fowler is the new senior vice president of global supply chain, where he will develop new processes for sales, operations planning, quality control and inventory management. Fowler joined Coleman in March 2003 from York International where he was vice president, operations.
Sam Solomon was named senior vice president, global administration and chief financial officer. Solomon was hired at Coleman in May 2005 after working at Coca-Cola Co. and Kidde PLC. He is responsible for financial oversight.
Kellwood buys Hollywould
Kellwood (NYSE: KWD) said it has acquired Hollywould, an apparel, accessories and shoe line founded by creative director Holly Dunlap. Terms of the acquisition were not disclosed.
Founded in 1999, Dunlap said her main source of inspiration is from the indulgent lifestyle of Hollywood. The goal is to expand it into a global brand, according to a statement released from Kellwood.
Kellwood, which is parent of Sierra Designs and Kelty, did not say how this would affect its earnings for the remainder of the year or in 2007.
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