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FGL reports footwear sales strongly raise 5.6% for Q1

08 Jun '05

3 min read

Canada's largest sporting goods retailer The Forzani Group Ltd reported first quarter results for the three months ended May 1, 2005.

Overall
Retail system sales (1) for the quarter were $259.8 million, a $32.1 million increase from sales for the 13 weeks ended May 2, 2004 of $227.7 million.

Revenue, consisting of corporate store sales, wholesale sales, service income, equipment rentals, franchise fees and franchise royalties, was $238.2 million, a $9.6 million, or 4.2% increase over the 13-week period last year due, primarily, to the acquisition of National Gym Clothing Limited (National Sports) on January 31, 2005. Combined gross margin for the 13 weeks ended May 1, 2005 was down 170 basis points to 29.0% of revenue, from 30.7% in the prior year.

This was due to a combination of factors, including various initiatives to ensure appropriate inventory positions as a weak winter season was exited, and the liquidation and subsequent closure of a competitor in the Ontario market during the quarter, and its effect on regional margins. These factors are more fully described below. In absolute dollars, the combined gross margin decreased $1.1 million to $69.1 million from $70.2 million in the 13-week period last year.

Comparable store sales from corporate locations were down 4.3%, a result, largely, of soft sales in inline skates, ski and snowboard, and licensed hockey products. Comparable corporate clothing sales, exclusive of winter categories and licensed products were down 1.7%. Footwear sales were strong, up 5.6%. Franchise comparable store sales were up

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