On its third quarter conference call, Easton-Bell Sports Inc. noted that the economy has taken a “significant downturn” since September, but it was able to deliver a solid third quarter with the help of new products. As reported last week, Easton-Bell's sales increased 7.8% to $203.4 million. Revenues grew 6.3% to $112.6 million in team sports and 9.8% to $90.8 million in action sports.
On its conference call held last Monday, Paul Harrington Easton-Bell's president and CEO, said the company's football business “performed well in the quarter, even after coming off a record setting second quarter.” But the “very strong” results in ice hockey, particularly in international markets, was helped by a number of new product introductions. The recently introduced S19 stick has experienced “strong demand” and the company started shipping its new line of hockey helmets during the quarter. Harrington also said Easton-Bell is introducing a new one piece composite stick, the SE16, and a new synergy skate for the upcoming fourth quarter, “both of which incorporate technologies and a look that we feel will again prove successful in the marketplace.” In addition, the hockey business unit is investing in operations and supply chain areas to improve service levels.
The baseball/softball market has been soft in the U.S. and sales are down year-on-year, low single-digits. However, Harrington said that after meeting with key retailers, he is “optimistic that the product strategies and brand marketing we outline will prove successful in the marketplace going forward.”
Sales of its Giro branded eyewear line “continue to gain momentum.” Sales of the Riddell Revolution IQ football helmet exceeded expectations. Easton-Bell's mass channel has seen strong growth from cycling helmets and accessories and Easton-branded baseball/softball equipment.
During the quarter, Easton-Bell shipped its first cycling products for Target. Giro branded cycling and snow helmets overall experienced double-digit growth year-to-date, which Harrington attributed to innovative design. Its Bell Star motorcycle helmet has also been well received.
Regarding its team dealer customers, Harrington doesnt expect macro conditions to impact this side of the business until after June 2009. He said improved customer service levels at Riddell has been “reaping some reward” as well as a better product-line in both helmets and shoulder pads.
Overall, Harrington said that although the fourth quarter is a slower period for the company, its order rate has remained positive.
“I will say that a couple of segments have experienced some softness,” said Harrington, mentioning its consumer product segment for Riddell and the license business.” And I think all retailers are a little bit nervous right around this time of the year on the snow business, but our order book is holding up.”
