NEW YORK — Strict management of its inventories helped Sport Chalet Inc. post a double-digit increase in third-quarter net income, but higher expenses pulled profits in the opposite direction for the nine months.
The Los Angeles-based operator of 28 sporting goods stores in California and Nevada posted net income of $2.6 million, or 38 cents a diluted share, during the three months ended Dec. 31, beating by 19.3 percent the $2.2 million, or 31 cents, reported in the year-ago period. The third-quarter performance was 2 cents better than First Call’s estimate, which was based on a single analyst.
Sales shot up 7.2 percent, to $72.3 million from $67.4 million, as comparable-store sales rose 2.2 percent. Two stores were opened during the period.
“In an environment of prolonged economic recovery, we are satisfied with our third-quarter performance,” said Craig Levra, chairman and chief executive officer, in a statement. “While other retailers have commented on the lackluster sales in the all-important holiday shopping season, we are pleased that this quarter’s comp sales increase reflects a positive change compared to the first half of the year.”
During the first half, Sport Chalet’s comps dipped 1.4 percent as overall sales grew 4.8 percent to $107.5 million. Second-quarter sales rose 3 percent despite a 2.3 percent decline in comps.
Levra cited “improving inventory procurement and management” as a key strategic objective that benefited third-quarter results.
However, the improvement in the most recent period wasn’t sufficient to offset bottom-line declines earlier in the year. Net income for the nine months fell 14.3 percent, to $4.1 million, or 59 cents a diluted share, from $4.8 million, or 68 cents, during the comparable year-ago period. Sales rallied 5.7 percent, to $179.8 million from $170 million, as year-to-date comps were flat.
The lower profit figures for the nine months were a result of higher selling, general and administrative expenses.