Q1 sales for Brunswick's fitness segment down 21 percent
Brunswick Corp. (NYSE: BC), parent of Life Fitness and Hammer Strength, swung to a first-quarter loss hampered by eroding sales, as well as restructuring charges and special tax items. Sales for its fitness segment were down 21 percent.
Its net loss was $184.2 million, or $2.08 per share, compared with a profit of $13.3 million, or $0.15 per share, last year. The restructuring charges and special tax items totaled $39.6 million, or $0.85 per share.
For the period ended April 4, sales slumped about 45 percent to $734.7 million from $1.35 billion as marine sales tumbled 52 percent.
"Our businesses continued to be under pressure from a variety of harsh economic factors that affected both domestic and international demand for our products, especially in our recreational marine markets," Chairman and CEO Dustan McCoy said in a statement.
Fitness segment sales dropped 21 percent to $118.6 million, down 21 percent from $149.2 million in the year-ago quarter. International sales, which represented 45 percent of total segment sales in the quarter, declined by 16 percent on a year-to-year basis.
The company said commercial equipment sales, which account for the largest percentage of the fitness segment's sales, declined in the quarter as gym and fitness club operators remained cautious about ordering equipment. Sales of consumer exercise equipment were down even more year-over-year, reflecting the effects of the weak economy, it noted.
The fitness segment's operating earnings were $0.3 million, including $1.0 million of restructuring charges, versus $8.1 million in the year-ago quarter. Brunswick said operating earnings reflected the unfavorable effect of the reduced sales, which was partially mitigated by reduced expenses.
For the overall company, Brunswick said it plans to increase its cost-cutting efforts. It now expects 2009 cost savings of $240 million, up from its prior estimate of $200 million.
While Brunswick is working to lower its wholesale shipments to minimize the number of boats and engines on dealers' floors, the company said it must also contend with reduced equipment orders from its fitness and bowling customers.
"We are not planning for any meaningful economic recovery in 2009 and our near-term focus remains clear, which is to: maintain strong liquidity without additional borrowings, take all appropriate actions to maintain dealer health and position ourselves to exit this global downturn as a stronger company," McCoy said in a statement.
Brunswick cautioned that its 2009 adjusted profit would be significantly lower than the previous year.
Sports Club sales fall 12.2 percent in Q1
The Sports Club Company (Pink Sheets: SCYL) reported a 12.2 percent decrease in first-quarter sales, but narrowed its loss.
For the quarter ended March 31, revenues were $14.0 million compared to $15.9 million in 2008.
Its net loss was $1.13 million, or $0.05 per basic and diluted share, compared to a net loss of $1.36 million, or $0.06 per basic and diluted share, last year.
The Sports Club Company, based in Los Angeles, Calif., operates and owns sports and fitness complexes nationwide under the brand name The Sports Club/LA.
Big 5's Q1 profit drops 33 percent
Big 5 Sporting Goods (Nasdaq: BGFV) said its first-quarter profit sank 33 percent as consumers continued to pull back on spending.
In the quarter ended March 29, the company earned $2.8 million, or $0.13 per share, compared with $4.1 million, or $0.19 per share, a year earlier.
Net sales dropped to $210.3 million from $212.9 million a year earlier as same-store sales declined 4.4 percent.
The company said that while customer traffic was down in January and February, business started showing signs of improvement in March. For the second quarter, Big 5 said it expects earnings of $0.10 to $0.18 per share, with sales coming in flat to up by low-single digits.
The company's board of directors has declared a quarterly cash dividend of $0.05 per share of outstanding common stock, which will be paid on June 15 to stockholders of record as of June 1.
Big 5 operates 381 stores and anticipates opening one new store in the next quarter.
--Compiled by Wendy Geister
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