FGL Sports revenues increased 7.5 percent to C$367.4 million (U.S. $363.7 mm) in the first quarter ended March 30, according to its parent company, Canadian Tire Corporation Limited (CTC). Comp store sales increased 8.8 percent on top of a 7.3 percent gain in reported for the first quarter of 2012.
On a conference call with analysts, Dean McCann, Canadian Tires EVP and CFO, said the strong sales performance at its FGL banner stores was largely due to the liquidation sales at stores closed during the quarter.
The FGL Sports subsidiarys store count was reduced to 406 by the close of the first quarter from 495 at the start of this year. The closings largely came from its smaller banners. Over the period, its largest banner, Sports Check increased its store count to 162 from 161 at the years start while Sports Experts, a franchised banner, and Atmosphere kept their store count at same, at 72 and 57 respectively. Other banners include National Sports, Hockey Experts, S3, and Nevada Bob’s Golf.
On the positive side, Sport Chek saw a 3 percent in comparable-store sales despite a warm March across the country. Sport Chek experienced strong sales in apparel and equipment, particularly in winter-related categories such as hockey, ski and snowboard. Sales per square foot improved across the FGL Sports group to C$311 from C$302 in the 2012 first quarter.
The top-line gains were offset by a lower gross margin, which reflected the clearance of the stores closed and higher year-over-year occupancy costs related to the new Sport Chek stores that have opened since the first quarter of 2012.
At FGL Sports, Michael Medline and his team successfully completed the banner rationalization initiative, closing all non-strategic banners on time and on budget, said Stephen Wetmore, Canadian Tires president and CEO, on the call. In addition, the team did a great job with customers in generating excitement and attention to the store closure deals and we have ended the quarter with a significantly smaller amount of inventory on hand than we had expected. FGL was less affected by the March weather pattern and the Sport Chek business grew well in the quarter with same-store sales up some 3 percent.
Overall, the company, which also owns Canadian Tire, PartSource and Mark’s Work Wearhouse, reported a 3 percent rise in first-quarter profit to C$73 million (U.S. $72.3 mm), or 90 cents (U.S. 89 cents) per share. Revenues rose 1.7 percent C$2.48 billion (U.S. $2.45 bn.)