Fitness financials: Forzani Group's Q2 profit rises, plus Finish Line, Crocs, Dick's, Costco, Wal-Mart

Fitness financials: Forzani Group's Q2 profit rises. Finish Line Q2 same-store sales fall. Crocs' shares up as analyst praises continued growth. Dick's president exercises options. Costco same-store sales for August up 2 percent. Wal-Mart August same-store sales rise.
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Forzani Group's Q2 profit rises

Forzani Group Ltd. (TSX: FGL), Canada's largest sporting goods retailer whose banners include Sport Chek, Sports Experts and Coast Mountain Sports, reported a higher second-quarter profit. Forzani also owns specialty fitness retailer Fitness Source, and is working on a new retail concept expected to debut this quarter.

The company earned CDN $5.4 million (USD $5.1 million), or CDN $0.16 a share (USD $0.15), in the three months ended July 29. That's up from CDN $1.9 million (USD $1.8 million), or CDN $0.06 (USD $0.05) a share in the year-earlier period. Cash flow from operations increased to CDN $13.8 million (USD $13.0 million), or CDN $0.41 (USD $0.38) per share, from CDN $11.8 million (USD $11.2 million), or CDN $0.36 (USD $0.34) per share, in the prior year.

Forzani said total revenue for the quarter, which includes corporate store sales, wholesale sales, service income, equipment rentals, franchise fees and franchise royalties was CDN $292.4 million (USD $277.5 million), up from CDN $284 million (USD $269 million) for the same time last year.

Retail system sales for the quarter were CDN $351.3 million (USD $333.4 million), a 4-percent increase from the comparable 13-week sales of CDN $337.9 million (USD $320.7 million). Same-store sales in corporate locations rose 0.4 percent in the quarter, while same store sales for franchises were up 6.1 percent.

Combined gross margin for the quarter was 34.9 percent of revenue, or CDN $102.1 million (USD $96.9 million), compared to 34.0 percent, or CDN $96.7 million (USD $91.7 million) in the previous year. Both retail and wholesale margins improved over the prior year.

Store operating expenses, as a percent of corporate store revenue, were 27.8 percent against the prior year of 27.4 percent. Same-store operating costs were 26.5 percent of corporate store revenue, 26.2 percent in the prior year. Same-store costs, in absolute dollars, increased CDN $1.0 million (USD $950,000) or 2.0 percent.

General and administrative expenses were 7.6 percent of total revenue versus the prior year's 8.3 percent. The absolute dollar decrease of CDN $1.4 million (USD $1.3 million) was a combination of standard year over year increases, offset by reduced accruals for performance-based compensation and reduced advertising expenses.

Earnings before interest, taxes and amortization were CDN $20.9 million (USD $19.8 million), compared to CDN $16.1 million (USD $15.2 million) for the 13-week period last year.

At the end of the second quarter, the company had 260 corporate stores and 228 franchise locations. This was a net increase of 86,923 square feet of retail selling space, a 1.5 percent increase versus the previous quarter. The company now has 488 stores from coast to coast versus 470 stores at this time last year.

The company also declared an annual dividend of CDN $0.30 per share (USD $0.28), payable quarterly, beginning in the fourth quarter of this fiscal 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 Sept. 5.)

Finish Line Q2 same-store sales fall

Same-store sales for Finish Line's (Nasdaq: FINL) second quarter fell 4.7 percent from the comparable period a year ago. Total sales for the quarter ended Sept. 1 rose 1 percent to $343 million from $338.6 million during the comparable quarter last year.

Finish Line is anticipating a quarterly loss between $0.04 and $0.06 for the quarter, including a charge of about $0.18 per share due to impairment of assets, a write-down of inventory and closing costs related to the closure of 15 stores under the Paiva brand.

Crocs' shares up as analyst praises continued growth

Shares of Crocs (Nasdaq: CROX) climbed Sept. 6 after an analyst lauded the company on its continued growth and better-than-expected results from its Mammoth product line.

Jeff Mintz of Wedbush Morgan Securities relayed in a client note that he was pleased with CFO Peter Case's assessment of the company's operations in a management call. Business is accelerating across Europe, with strength in Japan coming from its Jibbitz accessories line. The United States is benefiting from strong Internet sales and adult sports licensing, according to the company.

The Mammoth, a lined clog, has exceeded order expectations, with adult orders nearing 1 million pairs. "We believe the Mammoth could become the 'must have' item of this holiday season, and expect the company will have a difficult time meeting demand for the product," Mintz wrote in a note to clients.

He maintained the company's "Strong Buy" rating and $71 price target.

On Sept. 6, shares of Crocs added $2.52 to $58.45 in afternoon trading and closed at $58.40. The stock has traded in a 52-week range of $13.35 to $61.99.

Dick's president exercises options

William Colombo, the president and chief operating officer of Dick's Sporting Goods (NYSE: DKS), exercised options for 100,000 shares of common stock, according to a SEC filing.

In a Form 4 filed with the SEC on Sept. 4, Colombo reported he exercised the options for shares on Aug. 31 for $6 apiece, and then sold them the same day for $65 apiece.

Insiders file Form 4s with the SEC to report transactions in their companies' shares. Open market purchases and sales must be reported within two business days of the transaction.

Costco same-store sales for August up 2 percent

Costco Wholesale (Nasdaq: COST) said its August same-store sales rose 2 percent primarily on strong international sales. For the month, international same-store sales increased 8 percent while U.S. same-store sales edged up 1 percent. Total sales for the four-week period ended Sept. 2 climbed 6 percent to $4.84 billion from $4.56 billion in the prior year.

Same-store sales for the fourth quarter grew 5 percent as international same-store sales increased 9 percent and U.S. same-store sales gained 4 percent. Total sales for the quarter rose 3 percent to $20.06 billion from $19.5 billion in the year-ago period.

Fiscal 2007 same-store sales climbed 6 percent, with international same-store sale gaining 9 percent and U.S. same-store sales increasing 5 percent. Total sales for the fiscal year rose 7 percent to $63.06 billion from $58.96 billion.

Wal-Mart August same-store sales rise

Wal-Mart Stores (NYSE: WMT) said same-store sales rose 3.1 percent in August helped by back-to-school sales. Same-store sales for the period ended Aug. 31 rose 2.8 percent at Wal-Mart Stores and 5.2 percent at Sam's Club. Total sales for the month grew 9 percent to $28.22 billion, from $25.83 billion last year.

Year-to-date, same-store sales rose 1.5 percent while total sales grew 9 percent to $207.49 billion.


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