Growth overseas was not enough to offset decreases in the U.S. for Ashworth during the companys fiscal first quarter. The overall sales decline, paired with increased expenses as well as decreased gross margins related to the “underutilization of the Embroidery and Distribution Centers embroidery capacity” caused the company to post an expanded net loss during the seasonally slow fiscal first quarter.
Breaking down the sales decrease, sales in the domestic golf channel declined 22.0% to $9.0 million for the quarter from $11.5 million last year with the company attributing the slump to “an overall continued softness in the golf market.”
Revenues for the corporate distribution channel were $5.7 million, an increase of 2.3% from $5.6 million in last years fiscal first quarter. In the retail distribution channel, sales decreased 21.4% to $4.1 million due to “slowness of retail sell-through during the holiday season.” In addition, on a conference call with analysts, management said a decrease in door counts of approximately 20% fueled the decrease in retail sales.
First quarter revenues for Gekko Brands, LLC were $10.4 million, an increase of 3.5% over the first quarter of 2006 due to higher revenues in the collegiate bookstore channel and to Game Select Dealers, but partially offset by lower revenues from sales into the NASCAR/racing channel.
Revenues from the company-owned stores were $2.7 million, an increase of 19.0% over first quarter 2006. Since the first quarter of 2006, the company added a net of four new outlet stores bringing the company's total number of outlet stores to 18. The new outlet stores contributed $0.6 million in sales in the first quarter of fiscal 2007, but sales on a comparable store basis were down 7.9%.
Revenues from the international segment increased 7.1% to $6.3 million over the same period last year. Revenues were primarily driven by growth from Europe and Canada.
|Fiscal First Quarter Results|
|(in $ millions)||2006||2005||Change|
|GM %||40.8%||44.3%||-350 bps|
|SG&A %||50.0%||43.6%||+640 bps|
|Net Income||($2.4)||($0.1)||vs. flat|
|Diluted EPS||(17¢)||(0¢)||vs. flat|
|* at quarter-end|