MOSS ADAMS CAPITAL: Apparel and foowear market monitor highlights notable deals, stock prices and results.
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Another important Canadian retail customer that is increasingly getting into the action sports game reported third quarter earnings yesterday.
The Forzani Group has 350 corporate and 218 franchise sporting goods stores under 15 banners including Sport Chek and Coast Mountain Sports. When I was in Canada this summer, I saw a large selection of skate shoes at a Sport Chek in Vancouver, apparel from brands such as O’Neill and Split and accessories from Oakley and others. The company’s S3 (surf, skate, snow) chain in Quebec also carries many industry brands.
The company reported a strong increase in third quarter profits and an increase in total sales and same-store sales, but said unseasonably warm weather and consumer caution has thus far dampened fourth quarter sales.
Total revenue: up 5% to Canadian $381.1 million vs. the same period last year
Same-store sales: up 2.3% (corporate and franchise stores)
Gross margin: 34.4% vs. 33.3%
Net income: $11.4 million vs. $6.6 million
Forzani said the fourth quarter will be “challenging” because of warm weather early in the quarter and consumer caution. In the first five weeks of the quarter, same-store sales at corporate stores fell 8.6%.