Ashworth Posts Q4 Loss on Inventory Sell-Off…

Ashworth, Inc. management feels it is making progress against key initiatives to move back to profitability next year, but efforts against some of those initiatives cut into the bottom line in fiscal fourth quarter ended October 31, resulting in a net loss of $2.2 million, or 16 cents per share, for the period, compared to net income of $1.9 million, or 14 cents per share, for the year-ago quarter. Much of the increase in the Domestic segment came on the back of lower margin sales designed to help pare inventories going into the new fiscal year. The move had the expected impact on gross margins, which fell 700 basis points to 34.7% of sales for the fourth quarter from 41.7% of sales in the fiscal Q4 last year.

Total consolidated net revenue for Q4 increased 14.5% to $55.3 million, with domestic revenues increasing 16.5% to $47.9 million and revenues from the International segment rising 3.7% to $7.4 million. Within the Domestic business, the Corporate channel increased 22.4% to $6.4 million, and Golf channel revenue increased 16.1% to $21.5 million, while the Retail channel posted a decrease of 7.2% to $5.5 million for the period. Owned-retail revenues increased 87.5% to $2.4 million, primarily due to the net addition of five stores. From a brand standpoint, Gekko revenues increased 18.9% to $12.1 million in the quarter, while Ashworth brand sales increased 15.4% to $31.3 million, primarily due to the increase in lower margin sales. Callaway Golf apparel revenues increased 8.5% to $12.0 million, primarily due to an increase in Corporate sales and some growth in domestic Golf sales.