Ashworth, Inc. had a tough start to its fiscal year as sales declines led to a broader quarterly loss. The first quarter is typically the smallest quarter for the company and positive growth seen in the core, domestic golf channel is a good sign, but that channel was one of the only bright spots in the quarter.
Total revenues in the domestic golf channel in the first quarter 2008 increased 5.6% to $9.5 million as on-course strength more than offset declines off-course. Revenues from on-course golf retailers increased 8.9% or $578,000 over the prior year, but this increase was partially offset by a decrease of $76,000 in revenues from off-course golf retailers. Revenues for the corporate distribution channel were $4.1 million in the first quarter 2008, a decrease of 28.8% from last year.
Revenues for the retail distribution channel were $3.1 million in the first quarter 2008, a decrease of 24.1% from the first quarter 2007. First quarter 2008 revenues for Gekko Brands, LLC were $10.9 million, an increase of 4.6% over the first quarter 2007. Revenues from the company-owned stores were $2.5 million, a decrease of 7.9% as compared to the first quarter 2007. The decrease reflects a generally difficult retail environment as well as increased promotional activity.
Revenues from the International segment decreased 30.1% to $4.4 million in the first quarter 2008, a decrease of $1.9 million from the same period last year. Net revenues for Ashworth U.K., Ltd. decreased 45.1% or $2.2 million to $2.6 million for the first quarter of fiscal 2008 from $4.8 million for the same period of the prior fiscal year. The decrease was due to distribution center inefficiencies resulting from the implementation of a new ERP system at the U.K. facility together with changes in sales management. Net revenues for the other international segments increased 19.8% or $287,000 to $1.7 million for the first quarter of fiscal 2008 from $1.4 million for the same period of the prior fiscal year.
In the first quarter of fiscal 2008, the companys consolidated gross margin decreased 460 basis points to 36.2% of sales as compared to 40.8% of sales in the first quarter of fiscal 2007. In addition, SG&A expenses increased largely due to increased consulting fees, primarily associated with product design and supplementing the companys accounting function during the executive transition period. All told, the top line gains were compounded to push the company further into the red for the quarter than at the same point last year.