Ashworth, Inc. reported that it expects revenues for 2006 to be “approximately 2% to 3% below the level previously anticipated,” which even before this announcement, was at the lower end of $210 million to $220 million. The company attributed the decreased expectations to “lower than expected” fourth quarter at-once sales in the company's Domestic Golf Channel and Gekko subsidiary, which are typically of a higher gross margin nature. In addition, the company said it experienced “greater than expected” markdowns in its Retail and other channels.
The fourth quarter shortfall in higher margin revenues — together with greater than expected markdowns, lower than expected capacity utilization in its U.S. Embroidery and Distribution Center, and approximately $1.1 million of expense associated with the resignation of the company's former chairman and CEO and other organizational changes — has resulted in an expected fourth quarter loss of approximately 20 cents to 25 cents per diluted share. For fiscal year 2006, therefore, the company expects a profit of approximately 12 cents to 17 cents per diluted share.