Outdoor financials: Crocs swings to net loss in Q3, plus Sport Chalet, Dick's Sporting Goods

Crocs swung to a net loss in Q3, Sport Chalet's fiscal Q2 loss widened, and Dick's Sporting Goods shares hit a 52-week low.
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Crocs swings to net loss in Q3

Crocs (Nasdaq: CROX) said its sales and profits for the third quarter were rocked by "the extremely challenging retail environments in the United States and Europe."

Net loss for the three months ended Sept. 30 was $148.0 million, or $1.79 per diluted share, compared to net income of $56.5 million, or $0.66 per diluted share, in 2007. Crocs said the reported net loss of $148.0 million, on a loss before income taxes of $135.7 million, includes approximately $104.1 million in restructuring, impairment and inventory related non-cash charges.

The Company added that it also recognized foreign currency exchange rate losses of $14.6 million and increased its provision for returns and allowances, net by $19.5 million to $29.1 million during the quarter from $9.6 million in 2007. These items and charges contributed $138.2 million, on a pre-tax basis, to its operating loss for the quarter.

Revenue was $174.2 million compared to $256.3 million in the same period last year.

Gross profit for the third quarter 2008 was $2.4 million, or 1.4 percent of revenues, compared to $155.4 million, or 60.6 percent of revenues, for the third quarter of 2007.

Selling, general and administrative expenses, including foreign currency exchange rate gain or loss, were $104.4 million, or 59.9 percent of revenues, compared to $77.2 million, or 30.1 percent of revenues, last year.

Crocs said it now expects to generate revenues for the fourth quarter of fiscal 2008 of between $100 million and $120 million and diluted loss per share of approximately $0.50 to $0.65.

Sport Chalet's fiscal Q2 loss widens

Sport Chalet's (Nasdaq: SPCHA and SPCHB) fiscal second-quarter net loss widened as it continued to experience a difficult retail environment.

For the quarter ended Sept. 28, net loss was $4.2 million, or a loss of $0.30 per diluted share, compared to a net income of $739,000, or a loss of $0.05 per diluted share, for the second quarter last year.

Sales decreased 1.2 percent to $96.5 million for the second quarter of fiscal 2009 from $97.7 million for the second quarter of fiscal 2008. Seven new stores not included in same store sales contributed $6.4 million in sales for the quarter, while same store sales decreased 6.7 percent.

Gross profit as a percent of sales was 26.5 percent compared to 30.4 percent for the second quarter of last year. Sport Chalet said the drop was primarily due to increased promotional activity, increased rent as a percent of sales in newer stores, and increased use of its Action Pass which allows consumers to accumulate points for discounts on purchases.

Selling, general and administrative expenses as a percent of sales increased to 29.6 percent from 25.4 percent in the same period last year. It reflected the decrease in comparable store sales, the expenses associated with new stores, which take time to ramp up, and an increase in professional fees, it said.



Dick's Sporting Goods shares hit 52-week low


Shares of Dick's Sporting Goods (NYSE: DKS) fell sharply on Nov. 11 as a weak retail environment made investors nervous, ultimately causing the company to hit a new 52-week low during the day's trading.

Company shares shed as much as $2.38, hitting a low of $11.80, during the day's trading, part of a larger market drop. It closed at $11.94 on a volume of 4.2 million.



"We believe the current consumer slowdown will impact the company's ability to achieve our longer-term growth expectations as developers build fewer new retail centers and consumers reduce discretionary spending," Wedbush Morgan Securities analyst Jeff Mintz wrote in a research note.

Wedbush Morgan Securities downgraded Dick's to a "Hold" rating from a "Buy," saying the consumer turndown is going to be longer than initially believed.

--Compiled by Wendy Geister



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