The Forzani Group Ltd. reported that total system retail sales for the eight-week period “Back to School” period ending September 27, 2004 decreased 1.8 % over the prior year. Total comparable stores sales were $152.6 million, down 3.6% from the same period in the prior year.
Comparable store sales in the Company's corporate stores decreased 5.2%, while franchise stores increased by 1.4%. Back to School sales in August were lower than anticipated, partially offset by a strong September that saw sustained positive comparable sales for the entire month.
“Heavy competitive discounting in August combined with a change in the calendar, pushing Labor Day one week later, impacted sales in August. September saw a rebound with solid comparable store sales in both our corporate and franchise banners. Our back-half loaded promotional plans, which began in September, should continue to stimulate sales for the balance of the year,” stated Bob Sartor, CEO of the Company.
The Company, after taking into consideration its published results for the first half of the year and following its Back to School performance, is revising its earnings guidance downwards. Earnings are expected to be similar to the prior year's $0.86 per share. The suggested guidance range is therefore between $0.84 and $0.90 per share, depending upon the success of the Christmas selling season. This guidance is down from the previous estimate of $1.02 to $1.10. “Given the current volatile environment in retail sporting goods and our expectation that the price competition experienced in Ontario will continue for the balance of the year, management believes that a conservative downward revision is in order,” commented Mr. Sartor.
