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FGL announces first quarter results and strategic updates
07 Jun '11
5 min read
• Sport Chek launched its "Team Assist" program to offer discounts on products and services for individuals who register their purchases as part of a team.
• FGL completed the acquisition of Toronto-based Sports International CSTS Inc. ("Sportsphere"), a manufacturer and distributor of team and corporate logo'd apparel. In keeping with its stated intention to extend its consumer reach, FGL plans to integrate Sportsphere into its wholesale operations and grow its sales/marketing channels across Canada.
Fiscal First Quarter Financial Results
FGL's fiscal 2012 first quarter same-store retail system sales1 decrease of 2.0% was the result of a number of factors. First, the 2010 Vancouver Olympics spurred sales of licensed apparel, in particular Team Canada hockey jerseys, in the prior year. As noted in our Q4 press release, sales in the first four weeks of the first quarter were down 3.3% overall, but excluding the licensed apparel sales, were up 5.1%.
Second, unseasonably cold weather throughout much of the quarter delayed sales of key spring categories, most notably cycling and in-line skates, which were down a combined $4.1 million, or 32%, in the quarter, on a same-store basis. Excluding bikes, in-line skates and Olympic sales, comparative stores sales in the corporate division were up 1.8% for the quarter versus the prior year. As discussed below, now that spring has arrived, the Company is well on its way to recovering the lost sales in cycling and in-line skates.
FGL's total revenue was up 0.7% from a year earlier as a 10.2% increase in wholesale sales to third parties and the franchise network more than offset a 3.5% decline in retail sales. The increase in wholesale sales mainly reflected an 11% increase in sales to franchisees.
Retail system sales, which include sales from corporate and franchise stores, were $337.1 million, a decrease of $12.3 million, or 3.5%, from the comparable 13-week sales of $349.4 million a year earlier.
Gross profit was $109.9 million, down 3.3% from $113.6 million a year earlier, and gross margin was 33.3% of revenue compared with 34.7% of revenue a year earlier. The reduced gross margin rate was primarily due to the impact of the change in mix of business toward the lower margined wholesale revenues. Corporate gross margin rate was negatively impacted by the year over year reduction in high margined licensed products associated with the 2010 Vancouver Olympics as well as the percentage of late season clearance items versus new spring stock, due to the late arrival of spring weather.
Store operating expenses increased $0.7 million for the fiscal 2012 first quarter from a year earlier. Same-store operating expenses were 34.2% of corporate store revenue compared to 32.1% in the prior year. Same-store expenses, in absolute dollars, increased $2.4 million or 3.5%.
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• FGL completed the acquisition of Toronto-based Sports International CSTS Inc. ("Sportsphere"), a manufacturer and distributor of team and corporate logo'd apparel. In keeping with its stated intention to extend its consumer reach, FGL plans to integrate Sportsphere into its wholesale operations and grow its sales/marketing channels across Canada.
Fiscal First Quarter Financial Results
FGL's fiscal 2012 first quarter same-store retail system sales1 decrease of 2.0% was the result of a number of factors. First, the 2010 Vancouver Olympics spurred sales of licensed apparel, in particular Team Canada hockey jerseys, in the prior year. As noted in our Q4 press release, sales in the first four weeks of the first quarter were down 3.3% overall, but excluding the licensed apparel sales, were up 5.1%.
Second, unseasonably cold weather throughout much of the quarter delayed sales of key spring categories, most notably cycling and in-line skates, which were down a combined $4.1 million, or 32%, in the quarter, on a same-store basis. Excluding bikes, in-line skates and Olympic sales, comparative stores sales in the corporate division were up 1.8% for the quarter versus the prior year. As discussed below, now that spring has arrived, the Company is well on its way to recovering the lost sales in cycling and in-line skates.
FGL's total revenue was up 0.7% from a year earlier as a 10.2% increase in wholesale sales to third parties and the franchise network more than offset a 3.5% decline in retail sales. The increase in wholesale sales mainly reflected an 11% increase in sales to franchisees.
Retail system sales, which include sales from corporate and franchise stores, were $337.1 million, a decrease of $12.3 million, or 3.5%, from the comparable 13-week sales of $349.4 million a year earlier.
Gross profit was $109.9 million, down 3.3% from $113.6 million a year earlier, and gross margin was 33.3% of revenue compared with 34.7% of revenue a year earlier. The reduced gross margin rate was primarily due to the impact of the change in mix of business toward the lower margined wholesale revenues. Corporate gross margin rate was negatively impacted by the year over year reduction in high margined licensed products associated with the 2010 Vancouver Olympics as well as the percentage of late season clearance items versus new spring stock, due to the late arrival of spring weather.
Store operating expenses increased $0.7 million for the fiscal 2012 first quarter from a year earlier. Same-store operating expenses were 34.2% of corporate store revenue compared to 32.1% in the prior year. Same-store expenses, in absolute dollars, increased $2.4 million or 3.5%.
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The Forzani Group Ltd
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