The Sports Authority reported that net income for the fourth quarter ended January 29 was $25.6 million, or 97 cents per diluted share, compared with net income of $28.3 million, or $1.08 per diluted share, in the prior year's fourth quarter, when excluding the effect of after-tax merger integration costs of $13.7 million, or 52 cents per diluted share. Gross margins were down 40 basis points to 22.1% of sales in the quarter, with merchandise margins posting a flat quarter.
Total sales for Q4 were $713.8 million, compared with $712.0 million in the prior year's fourth quarter. Comp store sales for the period decreased 2.2% versus a 0.2% comp sales gain in the year-ago period.
The lack of winter weather in some key markets clearly impacted sales of winter goods for the quarter. The new TSA, with their strong background in snow sports at Gart, had made a considerable effort in ramping up the snow sports category in the old TSA stores in the Northeast and Upper Midwest, an effort that was stymied by the lack of snow. Still, those stores showed double-digit increases in the category in the quarter.
Chairman and CEO Doug Morton did say that TSA is experienced “improving sales performance” in all winter sports categories after post-Christmas weather turned more seasonal.
Management said that they will pull back a bit in the snow sports category for this year, indicating that they will focus on the top six vendors and more focused assortments in both snowboard and alpine ski this fall.
The camping and hunting merchandise, as well as the holiday-driven categories like table games and scooters, were said to be “below plan”. TSA is in the process of exiting the guns category completely. They will continue to carry accessories and some ammunition under the hunting category, but over the next 30 days firearms will be eliminated from 52 stores and a total of 70 will see guns eliminated by year-end, leaving 190 stores with the firearms category.
