Quarterly net earnings for sporting goods retailer The Forzani Group Ltd. rose 10.2 per cent to $3.9 million despite a “somewhat challenging” market.
Retail system sales for the second quarter of fiscal 2004 ended Aug. 3, 2003 grew 7.5 per cent to $262.7 million, compared to $244.3 million for the same period last year. Combined revenue from corporate and franchise divisions increased 8.2 per cent or $16.3 million to $215.7 million.
Gross margins of 34.2 per cent were down 1.5 per cent due to a change in the mix of corporate and franchise revenue and of increased competitive activity, particularly in clothing. Margin pressure was mitigated by cost controls that brought expenses to $58.2 million, down 1.8 per cent from the prior year.
“In what has proven to be a difficult retailing environment, the company performed well, particularly against the benchmark U.S. sporting goods sector which aggregated a comparable store decrease of 1.4 per cent in the most recently reported quarterly results,” said CEO Bob Sartor.
During the quarter, the company opened six corporate stores. In the franchise division, eight stores were opened and two closed. This gave Forzani 205 corporate stores and 175 franchise stores for a net increase of 151,776 square feet of retail selling space.
The Forzani Group (FGL-TSX) operates stores from coast to coast under the Sport Chek, Coast Mountain Sports and Sport Mart banners. It also franchises Sports Experts, Intersport, RnR, Atmosphere and Econosports outlets.
Web watch: www.forzanigroup.com
