Poor weather dampens Forzani sales
Canada's largest sporting goods retailer the Forzani Group Ltd. has posted a rise in sales for its first quarter ended May 4. Revenue was $307.5 million, up $12.9 million, or 4.4%, over the comparable period last year.
Sales for the quarter were $334 million, up $25.6 million, or 8.3%, compared with prior-year sales of $308.4 million. The increase came from prior-year acquisitions, most notably Athletes World ($24.7 million) and new store openings, which offset declines in same store corporate sales of 5.2%. The strength of fourth quarter sales of winter categories depleted inventories to an extent that hampered first quarter clearance events. This, coupled with unseasonable spring weather across the country, delayed the sale of spring categories, which, though improved over the prior year, were below expectations.
Net loss for the first quarter was $2.9 million, inclusive of a loss of $1.3 million from the operation of Athletes World.
Management said the results were: “A reflection of the old adage "too much of a good thing" where the continuation of the exceptional winter weather that drove Q4 2008 sales and reduced winter inventories to record lows, hampered the company's ability to generate positive sales momentum through the first eight weeks of the quarter in either the corporate or franchise division. The quarter ended on a positive trend with improved sales and margins, but couldn't recover the lost opportunity of those first 8 weeks of the quarter.
“The first quarter traditionally represents less than 22% of revenues and 2% of earnings, and the company expects to meet its operational plans for the year despite getting off to somewhat of a slow start.”
