Better margins boost Forzani’s Q4 profit
Forzani Group (TSX: FGL), Canada’s largest sporting goods retailer, posted a better-than-expected profit for the fourth quarter, helped by healthier margins. Its retail brands include Sport Chek, Coast Mountain Sports, Atmosphere and The Fitness Source.
For the quarter ended Jan. 31, Forzani earned CDN $22.9 million (USD $22.7 million), or 75 Canadian cents (USD $0.74) a share, compared with CDN $24.2 million (USD $24.0 million), or 80 Canadian cents (USD $0.79) a share, a year ago.
Total revenue was down 2 percent to CDN $372.9 million (USD $370.9 million) versus CDN 380.8 million (USD $378.8 million) last year, hurt by a 13.5 percent decline in wholesale sales to third parties and the franchise network.
Gross margin was 42 percent of revenue, compared with 39.8 percent a year ago. It said that was a result of a shift in the sales mix toward higher margined retail from lower margined wholesale revenue.
For the full year 2009, Forzani earned CDN 28.7 million (USD $28.5 million) down from 2008’s CDN 29.6 million (USD $29.4 million). Revenue was CDN 1.35 billion (USD $1.34 billion) compared to CDN 1.34 billion (USD $1.33 billion) in 2008.
Looking ahead, the company noted that for the first eight weeks of fiscal 2011, its overall retail system sales surged 14.5 percent versus an increase of 0.9 percent last year, helped by sales of Vancouver 2010 Winter Olympic licensed products, and by a return to seasonal weather.
(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 April 6.)
--Compiled by Wendy Geister
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