NEW YORK — Like their less physical counterparts, sporting goods retailers had limited success hurdling the tepid economy, war in Iraq and lousy spring weather during the first quarter.
Generally, comparable-store sales finished below year-ago levels but earnings came in ahead of Wall Street estimates.
At The Sports Authority, weak sales and comparable-store sales depleted profits by more than two thirds.
For the three months ended May 3, the Fort Lauderdale, Fla.-based firm posted a 71.3 percent fall in net income to $489,000, or 1 cent a diluted share. That compares with last year’s earnings of $1.7 million, or 5 cents. Net income was reduced by one-time aftertax charges accruing to $1 million. Earnings per share, however, did manage to beat the Wall Street estimates by 2 cents.
Sales for the period fell 4.1 percent to $339.1 million from $353.5 million last year, as poor weather depressed comps 5.7 percent.
As reported, The Sports Authority and Gart Sports Co. are merging in a deal slated to close in July.
“While the first-quarter sales environment was extremely challenging, all other facets of our business were very well controlled,” said chief executive officer Marty Hanaka in a statement. “We maintained our gross profit margin as a percent of sales at last year’s 26.8 percent level and were able to reduce selling, general and administrative expenses by $3.8 million, thereby also maintaining last year’s expense ratio at 26.1 percent of sales.”
Gart also had a tough quarter, as sagging sales led to smaller profits. For the three months ended May 3, the Denver-based retailer said earnings declined 11.8 percent to $2.3 million, or 18 cents, versus $2.6 million, or 22 cents, a year ago. Still, earnings per share beat the Wall Street forecast by 2 cents. Excluding nonrecurring charges and a tax benefit, net income soared 61.7 percent to $4.2 million, or 34 cents.
Sales for the period waned 6.8 percent to $228.4 million from $245 million, and same-store sales dropped 8.8 percent.
“As we begin the second quarter, we are encouraged by recent trends in both comp-store sales and margins,” said ceo Doug Morton, in a statement. “Additionally, our inventory mix is well positioned and we continue to maintain a tight control over expenses. With our pending merger with The Sports Authority, we remain committed to becoming the nation’s preeminent sporting goods retailer.”Bucking the larger trend, Foot Locker Inc. shrugged off the soggy spring and reported earnings and sales gains.
For the three months ended May 3, the New York-based retail giant said net income soared 90 percent to $38 million, or 26 cents. By comparison, last year the firm recorded profits of $20 million, or 14 cents. Excluding a $1 million, or 1 cent, aftertax charge for an accounting change, income in the most recent quarter would have been $39 million, or 27 cents. Earnings per share outpaced analysts’ predictions by a penny.
Sales for the period grew 3.5 percent to $1.13 billion from $1.09 billion but comps decreased 2.5 percent on a constant currency basis.
Matthew Serra, ceo, said in a statement, “We are somewhat more confident in our ability to increase our future quarter-over-quarter earnings per share, and we currently expect our second quarter 2003 net income from continuing operations to meet or exceed the current analysts’ consensus estimate of $0.24 per share.”
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