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Forzani Group FGL posts Q2 results
03 Sep '08
5 min read
Earnings for the quarter were $1.5 million, compared to $5.4 million in the prior year. Excluding the impact of Athletes World, earnings for the quarter were $1.9 million or $0.06 per share.
Store Activity:
During the quarter, the Company opened 1 Nevada Bob's Golf corporately owned store, acquired 1 Econosport store from a franchisee and closed 5 Athletes World locations. In the franchise division, 2 stores were opened (1 Atmosphere and 1 Hockey Experts), 1 Econosport was converted to corporate and 1 RnR store closed. As a result, at the end of the second quarter, the Company had 338 corporate stores and 227 franchise locations. This was a decrease of 6,081 square feet of retail selling space, a 0.1% decrease versus the previous quarter. The Company now has 565 stores from coast to coast (July 29, 2007 - 488 stores).
For the Year to Date:
Net losses for the 26-week period ended August 3, 2008, were $1.4 million, or $0.04 per share, compared to net earnings of $6.2 million, or $0.18 in the prior year. Excluding the impact of Athletes World, the Company recorded a net income of $0.4 million. Cash flow from operations decreased to $16.6 million from $26.2 million. On a per share basis, cash flow decreased 32.5% to $0.52 compared to $0.77 in the prior year.
Retail system sales for the 26 weeks were $690.8 million, a $31.1 million increase from sales for the comparative fiscal 2008 period. Same store sales in corporate stores decreased 5.3%, while franchise stores increased 1.1%, with total same store retail system sales decreasing 2.9%.
Revenue was $603.1 million, a $16.2 million, or 2.7% increase over the 26-week period last year. Combined gross margin for the 26 weeks ended August 3, 2008 was up 90 basis points to 35.0% of revenue, from 34.1% in the prior year. In absolute dollars, the combined gross margin increased $11.0 million, to $211.2 million, from the 26-week period last year.
Store operating expenses, as a percent of corporate revenue, were 31.6% versus 28.7% in the prior year. For the year to date, Athletes World store operating expenses have a higher run rate that the Company's other corporate banners due to the liquidation activities carried out in Athletes World during the first quarter of the year. On a year to date basis, Athletes World represents $14 million of the absolute dollar increase of $19.8 million.
General and administrative expenses were 8.7% of total revenue due to the impact of the Athletes World acquisition. Overall, the absolute dollar increase in general and administrative expenses was $4.1 million. Excluding the $5.5 million in Athletes World infrastructures costs, general and administrative costs fell by $1.4 million and represented 8.3% of total revenue versus 8.2% in the prior year.
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Store Activity:
During the quarter, the Company opened 1 Nevada Bob's Golf corporately owned store, acquired 1 Econosport store from a franchisee and closed 5 Athletes World locations. In the franchise division, 2 stores were opened (1 Atmosphere and 1 Hockey Experts), 1 Econosport was converted to corporate and 1 RnR store closed. As a result, at the end of the second quarter, the Company had 338 corporate stores and 227 franchise locations. This was a decrease of 6,081 square feet of retail selling space, a 0.1% decrease versus the previous quarter. The Company now has 565 stores from coast to coast (July 29, 2007 - 488 stores).
For the Year to Date:
Net losses for the 26-week period ended August 3, 2008, were $1.4 million, or $0.04 per share, compared to net earnings of $6.2 million, or $0.18 in the prior year. Excluding the impact of Athletes World, the Company recorded a net income of $0.4 million. Cash flow from operations decreased to $16.6 million from $26.2 million. On a per share basis, cash flow decreased 32.5% to $0.52 compared to $0.77 in the prior year.
Retail system sales for the 26 weeks were $690.8 million, a $31.1 million increase from sales for the comparative fiscal 2008 period. Same store sales in corporate stores decreased 5.3%, while franchise stores increased 1.1%, with total same store retail system sales decreasing 2.9%.
Revenue was $603.1 million, a $16.2 million, or 2.7% increase over the 26-week period last year. Combined gross margin for the 26 weeks ended August 3, 2008 was up 90 basis points to 35.0% of revenue, from 34.1% in the prior year. In absolute dollars, the combined gross margin increased $11.0 million, to $211.2 million, from the 26-week period last year.
Store operating expenses, as a percent of corporate revenue, were 31.6% versus 28.7% in the prior year. For the year to date, Athletes World store operating expenses have a higher run rate that the Company's other corporate banners due to the liquidation activities carried out in Athletes World during the first quarter of the year. On a year to date basis, Athletes World represents $14 million of the absolute dollar increase of $19.8 million.
General and administrative expenses were 8.7% of total revenue due to the impact of the Athletes World acquisition. Overall, the absolute dollar increase in general and administrative expenses was $4.1 million. Excluding the $5.5 million in Athletes World infrastructures costs, general and administrative costs fell by $1.4 million and represented 8.3% of total revenue versus 8.2% in the prior year.
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