Fitness financials: Gaiam Q3 posts wider net loss, plus adidas, Costco, Wal-Mart

Gaiam's Q3 posted a wider net loss, adidas posted a 2 percent rise in Q3 profit, Costco's October same-store sales fell 1 percent, and Wal-Mart's October same-store sales rose.
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Gaiam Q3 posts wider net loss, sales drop

Gaiam's (Nasdaq: GAIA) third-quarter revenue dipped 14.3 percent and its net loss widened. Also, it was among the biggest percentage losers in Nov. 7 trading.

For the quarter ended Sept. 30, revenue was $60.3 million, down from $70.3 million recorded in the same quarter last year. The company said excluding international revenues, which were affected by the transition from product sales to licensing arrangements, the revenue growth for the quarter was approximately 2 percent. The quarter over quarter comparison was also impacted by early holiday orders shipped in 2007 during third quarter.

Net loss for the third quarter, including a charge representing $0.36 per share, was $10.1 million, or $0.42 per share, versus $2.9 million, or $0.12 per share, last year.

Gross profit decreased to $33.8 million or 56.1 percent of revenue for the third quarter of 2008, from $46.1 million, or 65.6 percent of revenue, in the comparable quarter last year. The margin was partially impacted by the decision to expand Gaiam's distribution footprint by maintaining retail prices, while absorbing cost increases from higher freight charges and the dollar decline.

The company said its strategy to aggressively pursue store-within-store and media category management expansion will continue to impact the margin through fourth quarter. Gaiam expects to return to mid-60s margin, excluding the solar business, by first quarter 2009 and achieve its goals of 75,000 retail doors and 10,000 store-within-store presentations.

Selling and operating expenses decreased 11.9 percent to $34.0 million from $38.6 million during the same quarter last year.

Other expenses of $13.9 million for the quarter include a non-cash, tax-deductible impairment charge related to the company's acquired media libraries, website development costs and related assets. Gaiam said this charge increased its overall tax benefit by approximately $5.5 million, and, as a result, the company expects to receive tax refunds and benefits of approximately $12 million early next year.

Gaiam was among the biggest percentage losers in Nov. 7 trading among companies with market capitalizations under $1 billion. Its shares fell as low as $6.02 in day's trading to close at $6.35, down $1.18 from the day before, on a volume of 251,300.

adidas posts 2 percent rise in Q3 profit

Third-quarter profit for adidas (XETRA: ADS.DE) rose 2 percent on higher sales, but the company pulled its guidance for 2009.

adidas earned EUR 302 million (USD $390.6 million) in the July-September period compared with EUR 298 million (USD $379.2 million) a year ago, as sales rose 5 percent to nearly EUR 3.1 billion (USD $3.9 billion) compared with EUR 2.9 billion (USD $3.6 billion) last year.

Looking to the end of the year, adidas said it still expects net profit growth of 15 percent, but "as a result of the uncertain global macroeconomic environment," it canceled its outlook for next year.

(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Nov. 6.)



Costco October same-store sales fall 1 percent


Costco Wholesale (Nasdaq: COST) said its same-store sales dipped 1 percent in October, hurt by unfavorable foreign exchange rates. Excluding the foreign exchange rates, same-store sales would have climbed 3 percent.

Total sales for the period ended Nov. 2 rose 2 percent to $5.3 billion.



Wal-Mart October same-store sales rise


For the month of October, Wal-Mart Stores reported a 2.4 percent increase in same-store sales. Same-store sales rose 2.5 percent including fuel. In the U.S., they rose 2.2 percent at Wal-Mart namesake stores and 3.6 percent at the Sam's Club warehouse stores.

Total October sales rose 2.3 percent to $28.57 billion, including a 6 percent decline in international sales. The strengthening U.S. dollar hurt international sales by 14.8 percentage points.

The company also said it will cut prices on thousands of items during the holiday season in an effort to save consumers a total of $200 million.

--Compiled by Wendy Geister



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