Forzani's Q3 profit down 33 percent, sales up nearly 9 percent
Third-quarter profit for Forzani Group (TSX: FGL), Canada's largest sporting goods retailer, fell 33 percent, saying the quarter was "a roller coaster ride … as the financial crisis sent nervous consumers to the sidelines."
In the three months ended Nov. 2, the company earned CDN $8.4 million (USD $6.7 million), or CDN $0.28 (USD $0.22) a share, down from CDN $12.6 million (USD $10.1 million), or CDN $0.36 a share (USD $0.28), for the same time last year.
Revenue rose about 8.8 percent to CDN $362.9 million (USD $291.3 million) from last year's $333.5 million (USD $267.7 million), partly due to its franchise division seeing double-digit growth.
Retail system sales for the quarter were $381.0 million (USD $305.8 million), an increase of 10.6 percent from the comparable 13-week sales of $344.6 million (USD $276.6 million).
Same-store sales in corporate locations were down 0.2 percent and increased 11.5 percent in franchise locations, for an overall same store sales increase of 3.8 percent.
The quarterly gross margin was 33.3 percent of revenue, down from 34.2 percent.
Earnings before interest, taxes and amortization were $27.3 million (USD $21.9 million), or 7.6 percent of revenues, compared to $32.9 million (USD $26.4 million), or 9.9 percent of revenues, for the 13-week period last year.
Forzani said it would keep its inventories lean and rein in its 2009 capital expenditures as it gauges the full effects of the economic downturn. But the company added that it is in good shape to "ride out" the current economic storm.
The company declared a dividend of $0.075 (USD $0.060) per Class A common share, payable on Feb. 2, 2009, to shareholders of record on Jan. 19, 2009.
Forzani Group is parent of Sport Chek, Coast Mountain Sports and Fitness Source, among others.
(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. 12.)
Amer Sports lowers its full-year 2008 guidance
Amer Sports said its sales for November and December have been below expectations, and as a result, the company will not reach its EBIT (excluding one-off items) guidance of EUR 80 million to EUR 90 million in 2008. The weaker-than-expected performance in the fourth-quarter partly reflects poor results at Precor.
The company said it expects its full-year sales in local currencies to be close to last year's level.
The demand for Precor's commercial fitness products remained at last year's level until October, but has slowed down during the past two months, it said. As the last quarter of the year is seasonally important for Precor, the weakened market conditions have a big impact on Precor's full-year results. The company noted that Precor continues to adjust its cost base to the prevailing market conditions.
Amer Sports will release its full-year 2008 results on Feb. 5.
Analyst downgrades Under Armour
A Wedbush Morgan Securities analyst told clients that high inventory and limited growth opportunities are likely to weigh on Under Armour (NYSE: UA) in 2009 as difficult economic conditions continue.
Jeff Mintz of Wedbush Morgan Securities downgraded Under Armour to "Hold" from "Buy" and reduced his share price target to $25 from $27. He wrote in a client note that the company is likely to be challenged in 2009 as men's apparel stores face ongoing weakness.
"In addition, although the company has reduced inventory growth over the last several quarters, inventory remains high, especially given the slower consumer environment," Mintz wrote in a note to clients.
Mintz added that Under Armour may be hurt as retailers that carry its merchandise, such as Dick's Sporting Goods an Hibbett Sports, scale back their 2009 store opening plans. The impact may be partially offset by Dick's carrying more Under Armour products in its remerchandised stores, he noted.
Costco reports flat Q1 profit
Costco (Nasdaq: COST) reported nearly flat first-quarter profit, citing the stronger dollar and cuts by U.S. consumers in spending on nonessentials.
Profit for the three months ended Nov. 23 rose less than 1 percent to $262.5 million, or $0.60 per share, from $262 million, or $0.59 per share, a year earlier. The results include charges of $0.05 per share related to an accounting adjustment stemming from life-insurance contracts and a write-down on corporate investments.
Revenue rose 4 percent to $16.39 billion from $15.81 billion last year.
Same-store sales rose 1 percent, including a 3-percent rise in the United States and a 7-percent decline internationally.
--Compiled by Wendy Geister
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