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.
This story first appeared in the February 12, 2003 issue of WWD. Subscribe Today.
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.