Press Release:
LOS ANGELES, June 4, 2012 (GLOBE NEWSWIRE) — Sport Chalet, Inc. (Nasdaq:SPCHA – News) (Nasdaq:SPCHB – News) today announced its financial results for the fourth quarter and full year ended April 1, 2012. Fiscal 2012 was a 52 week year and fiscal 2011 was a 53 week year that included one extra week in the fourth quarter (see “Fiscal Calendar” below for details).
Fourth Quarter Summary
Comparable store sales decreased 5.3% primarily due to the previously announced effects of unseasonably warm and dry winter weather;
Comparable store sales of non-winter categories increased 2.6%;
Online sales increased 11.5%;
Online sales of non-winter categories increased 56.9%;
Net loss was $3.8 million.
Fiscal 2012 Summary
Net sales decreased $12.6 million, or 3.5%, to $349.9 million;
Absence of extra week accounted for $5.8 million of sales decline;
Store closure accounted for $4.1 million of sales decline;
Comparable store sales decreased 0.6%;
Online sales increased 22.0%;
Net loss was $5.1 million.
Craig Levra, Chairman and CEO, stated, “The nearly unprecedented warm and dry winter weather we experienced in the third quarter continued into the fourth quarter and significantly affected our sales and profitability. We are encouraged, however, that our efforts to re-align our business model in light of the economic slowdown, and our commitment to be first to market with performance, technology and lifestyle merchandise, to expand our specialty brands and to emphasize the expertise of our team, has strengthened our underlying core business.”
“Our comparable store sales increased 2.8% for the nine weeks ended June 3, 2012 and with a more normal winter, we believe the consistent improvements we have made to our business over the past few years have positioned us to return to profitability for fiscal 2013.”
Fourth Quarter Results
Net sales decreased $16.3 million, or 16.6%, to $81.9 million for the fourth quarter of fiscal 2012 from $98.2 million for the fourth quarter of fiscal 2011. The decrease in sales is primarily due to the extra week in the fourth quarter of fiscal 2011 that contributed $9.7 million to sales in that quarter.
Excluding the extra week in the fourth quarter of fiscal year 2011, net sales decreased $6.6 million, or 7.5%, primarily due to a comparable store sales decrease of $4.4 million, or 5.3%, a store closure decrease of $2.0 million, and an increase in the usage of our customer relationship management program, Action Pass, which requires sales be reduced as points are earned, partially offset by an increase in online business of 11.5%.
The comparable store sales decrease was due to the unseasonably warm and dry winter weather, which significantly affected snowfall at the resorts most frequented by our customers, as previously announced. This resulted in a 32.1% sales decrease in winter related merchandise, which was partially offset by a 2.6% sales increase in non-winter categories. Online sales of winter related merchandise decreased 27.7% while online sales of non-winter categories increased 56.9%.
Gross profit as a percent of sales decreased to 23.9% from 29.0% for the fourth quarter of the prior year primarily as a result of the decrease in sales as well as a decrease in sales of winter rentals and repairs, which have higher margins. Selling, general and administrative expenses (SG&A) as a percent of sales slightly increased to 25.5% from 25.4% in the same period last year, primarily due to the decrease in sales.
Net loss for the quarter ended April 1, 2012 increased to $3.8 million, or $0.27 per diluted share, compared to net income of $0.3 million, or $0.02 per diluted share, for the quarter ended April 3, 2011.
Full Year Results
For the fiscal year, net sales decreased 3.5% to $349.9 million from $362.5 million for fiscal 2011, primarily due to the extra week in fiscal 2011 which contributed $5.8 million to sales. Excluding the extra week in fiscal year 2011, net sales decreased $6.8 million, or 1.9%, primarily due to a store closure decrease of $4.1 million, a comparable store sales decrease of $1.9 million, or 0.6%, and an increase in the usage of our customer relationship management program, Action Pass, which requires sales be reduced as points are earned, partially offset by an increase in online business of 22.0%.
The comparable store sales decrease was due to the unseasonably warm and dry winter weather experienced in the second half of the year, which significantly affected snowfall at the resorts most frequented by our customers. This resulted in a 25.9% sales decrease in winter related merchandise, which was partially offset by a 4.6% sales increase in non-winter categories in the second half of the year. Online sales of winter related merchandise decreased 18.7% while online sales of non-winter categories increased 41.3% in the second half of the year.
Gross profit as a percent of sales decreased to 27.3% from 28.2% for fiscal 2011, primarily as a result of the decrease in sales, a decrease in sales of winter rentals and repairs, which have higher margins, and an increase in the usage of Action Pass. SG&A expenses as a percent of sales slightly decreased to 25.5% from 25.6% a year ago.
Net loss for fiscal 2012 increased to $5.1 million, or $0.36 per diluted share, from a net loss of $3.0 million, or $0.21 per diluted share for fiscal 2011.
Mr. Levra concluded, “Our company has developed amazing resiliency, having weathered the housing crisis which began in California in 2007, the financial meltdown resulting from the housing crisis in 2008, the credit crisis of 2009, the foreclosure and unemployment crisis in the western United States in 2010 and now one of the worst winters on record.”
“No other retailer in America has been “stress-tested” more than Sport Chalet. I am very proud of our Experts who have helped the company work through these challenges and appreciate the support from our customers, vendors and business partners. This is why we believe our future is bright, and I am excited to announce our first new store since 2008 is scheduled to open in May 2013.”
New Store Opening
The Company currently plans to open a store in May 2013 in Downtown Los Angeles. Sport Chalet will be an anchor tenant at Brookfield Office Properties’ (NYSE:BPO – News) (TSX:BPO – News) FIGat7th, the destination retail center at the intersection of Figueroa Street and 7th Street undergoing a $40 million redevelopment program. The store will occupy 26,800 square feet of space at the lower courtyard level, and will join City Target as the first new anchors at the redeveloped FIGat7th. This store will open with the next generation design of enhanced displays, fixtures, and graphics to reinforce its brand and technical merchandise and service offerings.
