In the third quarter, the soon-to-be acquired retailer Golf Galaxy, Inc. reported its fifteenth consecutive quarter of comparable store sales growth. Unfortunately, costs related with that pending acquisition by Dicks Sporting Goods caused the company to miss its bottom line guidance, with an expanded seasonal net loss. However, excluding the acquisition costs, the bottom line fell in the mid-range of the companys expectations.
Net sales increased 45.1% in the third quarter to $46.1 million from $31.8 million for the same period of the prior fiscal year, while comparable store sales increased 3.8% after a 6.7% increase in the year-ago period. During the quarter, services revenues increased to 4.8% of overall sales, or approximately $2.2 million, up from 3.3% of sales, or $1.1 million, in the same quarter last year. During the quarter, the company completed its retrofit of all stores with the GolfWorks store-in-store concept, which management sees helping to grow services revenues going forward.
The company reported a net loss for the third quarter of $3.4 million, or a loss of 31 cents per diluted share, expanding from a loss of $1.6 million or 15 cents per diluted share last year. Third quarter results include acquisition-related costs of $944,000, net of tax, or 9 cents per diluted share, associated with the company's pending acquisition by Dick's Sporting Goods, Inc. Excluding acquisition-related costs, the company's pro forma net loss for the third quarter of 2007 was $2.5 million, or a pro forma diluted loss per share of 22 cents. The company's guidance for the quarter, which excluded acquisition-related costs, was for a net loss of $2.7 million to $2.3 million, or 25 cents to 21 cents per diluted share.
