Escalade, Inc. reported that Sporting Goods segment revenue declined 14% in the second quarter and in the first half of 2008 compared to the prior year. Sales to mass retail customers declined 23% for the period, a trend attributed to lower sell-through on game room products due to consumer uncertainty associated with the weak U.S. economy. The weakness has prompted several of the company’s key retail customers to reduce inventories, which has led to a reduction in orders placed with Escalade.
The company said sales to Sears Holdings were down 66% in the first half of 2008 and are expected to decline further in the second half of 2008 because ESCA has ceased shipping table tennis and billiard tables to Sears Holdings. These product lines comprised 50% of total sales to Sears Holdings in fiscal 2007.
Sales to specialty retailers and dealers were “relatively unchanged” in the first half of 2008 and are expected to be similar in the second half compared to the same period in 2007. Based on first half results and product placement information, the company expects Sporting Goods revenue for 2008 to be approximately 20% lower in 2008 compared to the prior year.
Total company revenues for Q2 declined 9% to $45.8 million from $50.5 million a year ago. ESCA posted a net loss of $0.7 million, or 6 cents a share, compared to net income of $2.4 million, or 19 cents, in the prior year.
