Outdoor financials: Forzani reports record Q4 earnings, plus West Marine, Exel, Sport Chalet

Forzani reported record Q4 earnings, West Marine's Q1 sales dropped, Exel announced the results of its annual general meeting, and Sport Chalet named a chief merchandising officer.

Forzani reports record Q4 earnings

Forzani Group (TSX: FGL), Canada's largest sporting goods retailer, said fourth-quarter profit rose 36 percent, helped by an additional week of sales, lower taxes and a cold winter. Its retail banners include Sport Chek, Sports Experts and Coast Mountain Sports.

Forzani said fourth-quarter earnings were a record CDN $28.7 million (USD $28.2 million), or CDN $0.85 (USD $0.83) a share, in the three months ended Feb. 3. That is up from a net profit of CDN $21.1 million (USD $20.7 million), or CDN $0.62 (USD $0.61) a share, in the year-before period.

The company said lower corporate income tax rates added CDN $2.2 million (USD $2.1 million), or CDN $0.06 (USD $0.05) a share, to earnings.

Revenue rose about 16 percent to CDN $410.6 million (USD $404.2 million). Same-store sales increased 10.6 percent in corporate stores and 17.7 percent in franchise locations.

Gross margin slipped to 40 percent of revenue from 41.2 percent, reflecting "aggressive pricing" to offset a stronger Canadian dollar.

Net earnings for the year were CDN $47.5 million (USD $46.7 million), or CDN $1.40 per share (USD $1.37) compared to CDN $35.2 million (USD $34.6 million) and CDN $1.06 per share (USD $1.04) in the prior year -- a 34.9-percent increase in profits and a 32.1-percent increase in earnings per share.

Revenue for the full year '07 was CDN 1.33 billion (USD $1.30 billion) compared to CDN 1.26 billion (USD $1.24 billion) the previous year.

For the first eight weeks of the first quarter, Forzani said same-store sales from corporate stores were down 8.0 percent and franchise same-store sales decreased 4.3 percent for an overall retail system sales decline of 6.6 percent. It said continuing winter weather across the country hampered sales of spring products. Corporate margins rose versus prior year as a result of cleaner winter inventories.

The company noted that it's planning a series of moves to bolster sales and margins this year. It will spend about CDN $30 million (USD $29.5 million) to open 38 new stores and renovate another 12 to 14.

Forzani said it would also test new types of retail offerings. It has opened three S3 stores, which sell snow, skate and surf gear, and plans to open two more this year and accelerate that pace in 2009.

Forzani had 344 corporate stores and 223 franchise locations at the end of the quarter, an 18 percent jump from the total of 479 stores it had at yearend 2007.

(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 10.)

West Marine Q1 sales drop

West Marine (Nasdaq: WMAR) said same-store sales fell 9.4 percent during the first three months of the year because of "significant softness" in the market.

The company said it generated $113.3 million in revenue in the 13 weeks ended March 29, down from $125.8 million a year earlier.

Sales in the company's stores fell 8.9 percent to $97.1 million, while wholesale sales dropped 12.9 percent to $9.1 million. Direct sales fell 19.2 percent to $7.1 million.

Exel announces results of annual general meeting

At Exel's recent annual general meeting, it elected its board of directors, declared a dividend and named an auditor.

The company elected five members to the board of directors. Kari Haavisto, Peter Hofvenstam and Vesa Kainu were re-elected, while Göran Jönsson and Heikki Mairinoja were elected as new members. Jönsson is Exel Oyj's resigning president and CEO. Mairinoja was formerly Oy G.W. Sohlberg Ab's CEO and Uponor Group's CEO.

Members of the meeting declared a dividend of EUR 0.20 (USD $0.31) per share for FY '07. Shareholders of record on April 15 will be paid on April 22.

Ernst Young was re-elected as the auditor of the company until the end of the next annual general meeting.

At the board's organizational meeting after the annual general meeting, the board of directors elected Peter Hofvenstam as chairman.

Sport Chalet names chief merchandising officer

Sport Chalet (Nasdaq: SPCHA and SPCHB) has appointed Tom Tennyson to the newly created position of executive vice president-chief merchandising officer. He will be responsible for all merchandising and marketing initiatives as well as in-store merchandise presentation for Sport Chalet.

Most recently, Tennyson served as senior vice president, general merchandising manager at Mervyns Department Stores, where he was involved with merchandising and marketing as well as logistics and systems. He's also worked for Galyan's Trading Company, Dick's Sporting Goods and Kohl's Department Stores.

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