The Sportsmans Guide leveraged strong Internet sales and the acquisition of The Golf Warehouse to boost sales in the fourth quarter by 29.0% to $92.5 million from the $71.7 million reported last year. The base business reported sales growth of roughly 10% for the quarter with Internet related sales accounting for 42% of sales. The Golf Warehouse contributed approximately $13 million to the top-line sales in Q4 with 95% of that business generated on the Internet.
Gross margin for the fourth quarter fell 110 basis points to 34.3% of sales, while SG&A improved by 80 basis points, from 27.1% of sales last year to 26.3% in Q4 2004. Net earnings increased 21.1% to $4.6 million, or 85 cents per diluted share in Q4, compared to $3.8 million, or 71 cents per diluted share, in Q4 2003.
Full year sales increased 19.4% to $232.5 million from $194.7 million in 2003. Net earnings jumped 23.3% to $7.6 million, or $1.43 per diluted share, compared to $6.2 million, or $1.16 per diluted share, in 2003.
The company stepped up its marketing efforts by shipping 50.5 million catalogs throughout the year compared to 46.5 million during 2003. Sportsmans guide produced 35 different catalog editions compared to 33 last year. The company expects to see some synergies in this department with the acquisition of TGW; roughly ten cents can be saved off of every TGW catalog by consolidating the printing with Sportsmans Guide.
Gregory R. Binkley, SGDEs president and CEO, during a conference call told the media and investors that Sportsmans Guide is aware that certain retailers are aggressively expanding their retail square footage, but this has not had any effect on his business.
SGDE also announced a 3-for-2 stock split in the form of a 50% stock dividend. Earnings for 2005 pre-split basis should be in the range of $1.70-$1.75 per share on sales between $270 million and $275 million.
