Outdoor financials: Amer Sports lowers FY '08 guidance on weak wintersport results, plus Forzani, Under Armour, Wolverine

Amer Sports lowered its FY '08 guidance on weak wintersport results, Forzani's Q3 profit was down 33 percent and sales were up nearly 9 percent, an analyst downgraded Under Armour, and Wolverine declared a quarterly dividend.
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Amer Sports lowered its FY '08 guidance on weak wintersport results, Forzani's Q3 profit was down 33 percent and sales were up nearly 9 percent, an analyst downgraded Under Armour, and Wolverine declared a quarterly dividend.

Amer Sports lowers FY '08 guidance on weak wintersport results

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 in its wintersports equipment division.

The company said it expects its full-year sales in local currencies to be close to last year's level.

Within the wintersports equipment business, Amer Sports said re-orders are below expectations despite good snow conditions at the start of the skiing season, reflecting retailers' general cautiousness in the current environment. Even if re-orders are slower-than-expected, the segment's results in 2008 will improve compared with last year as a result of already completed efficiency improving measures.

Amer Sports will release its full-year 2008 results on Feb. 5.

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.)

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.

Wolverine declares quarterly dividend

The board of directors of Wolverine World Wide (NYSE: WWW) has declared a quarterly cash dividend of $0.11 per share of common stock. The dividend is payable on Feb. 2, 2009, to stockholders of record on Jan. 2, 2009. The dividend is equal to the last quarterly dividend and represents an indicated annual dividend of $0.44 per share.

--Compiled by Wendy Geister

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