Press Release:
Sport Chalet Reports Second Quarter and Six Month Fiscal 2014 Results
LOS ANGELES, Nov. 11, 2013 (GLOBE NEWSWIRE) — Sport Chalet, Inc. (SPCHA) (SPCHB), a premier, full service specialty sporting goods retailer, today announced its financial results for the second quarter and six months ended September 29, 2013.
Second Quarter 2014 Results
Sales decreased 5.2% to $86.7 million from $91.5 million in the same period last year. Sales were lower due to a 2.5% comparable store sales decrease, a sales decrease of $1.8 million from the closure of three underperforming stores, and lower sales in the Team Sales Division due to changes in personnel. These declines were partially offset by a 32.4% increase in Online sales and the contribution of one new store opened at the end of the first quarter. The comparable store sales decline was reflective of general consumer caution and an uneven retail environment.
Gross profit decreased $2.7 million, or 10.8%, and as a percent of sales decreased to 25.9% from 27.6%. The decrease in gross margin reflects an increase in promotional activity to stimulate sales as well as the decrease in sales.
Selling, general and administrative (“SG&A”) expenses increased $0.9 million, or 4.1%, due primarily to higher advertising spending in the quarter to promote sales. As a percent of sales, SG&A increased to 26.3% from 24.0% in the same period last year.
The Company’s net loss for the second quarter of fiscal 2014 was $3.0 million, or $0.21 per diluted share, compared to net income of $0.8 million, or $0.05 per diluted share, in the second quarter of last year.
CEO Commentary
“Our second quarter had a disappointing start, as sales trends were weak in July and August, but turned positive in September on a comparable basis,” said Craig Levra, Chairman and CEO. “Sales trends have continued to improve as we progressed into fall, and our Team Sales Division is also beginning to move into positive territory.
“Since opening in June, our next generation store in Downtown Los Angeles has delivered significantly better than average sales per square foot and gross margin than the chain as a whole. The flexible store format allows us to continually adapt the highly tailored merchandise mix to appeal to our Downtown customer base, and early results have exceeded our expectations. With additional capital, we believe there is enormous sales growth potential in rolling out this next generation format across our existing store base through a strategic remodel program, and opening new next generation stores in both our core markets and new geographies.
“We have taken significant steps over the past year to accelerate our growth strategy, including the recent engagement of a financial advisor to help us find the right path to new growth capital, as well as the addition of new talent to our Board of Directors and our Online Division. We continue to navigate the choppy retail environment, and we are concentrating all of our efforts to maximize sales while containing costs. We are optimistic that our premium brands and quality merchandise, best-in-class service, and our ‘Expert’ staff engagement with customers position us well for success in the coming holiday selling season.”
Six-Month 2014 Results
For the first half of fiscal 2014, sales decreased 4.0% to $168.3 million from $175.3 million for the first half of the prior fiscal year. Comparable store sales decreased 1.7% in the first half of 2014.
Gross profit decreased $4.6 million, or 9.5%, and as a percent of sales decreased to 26.1% from 27.7% for the first half of fiscal 2013.
SG&A expenses increased $1.8 million, or 4.1% for the first half of 2014. As a percent of sales, SG&A increased to 26.4% from 24.3% in the same period last year.
The Company’s net loss for the first half of 2014 was $5.9 million, or $0.41 per diluted share, compared to net income of $0.9 million, or $0.06 per diluted share, in the first half of fiscal 2013.
About Sport Chalet, Inc.
Sport Chalet is a premier, full service specialty sporting goods retailer featuring the industry’s top sports brands in apparel, footwear, and sports equipment. Founded in 1959 by Norbert Olberz, the company has 52 stores in Arizona, California, Nevada and Utah; an online store at www.sportchalet.com; a Team Sales Division; and offers more than 50 specialty services for the sports enthusiast, including online same day delivery, climbing, backcountry skiing, ski mountaineering, avalanche education, and mountain trekking instruction, car rack installation, snowboard and ski rental and repair, Scuba training and certification, Scuba boat charters, team sales, gait analysis, baseball/softball glove steaming and lacing, racquet stringing, and bicycle tune-up and repair at its store locations. For more information, visit Sport Chalet at www.sportchalet.com.
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