The Forzani Group Ltd. reported that net earnings for the fourth quarter will be between $0.46 and $0.48 per share versus $0.43 per share in the prior year. Comparisons with the prior year are impacted by the early adoption of stock-based compensation and the impact of a 53rd week in last year's results. After adjusting for these items, comparable earnings will be in the range of $0.48 to $0.50 per share versus $0.40 last year, an increase of 20% or more.
The fourth quarter results, while a marked improvement over the prior year, were not sufficient to allow the Company to reach its annual earnings targets. As a result, the Company has revised its earnings guidance for the year ended February 1, 2004 to between $0.85 and $0.87 per share. The Company's prior guidance was $1.01 to $1.05 per share. After adjusting for the Forzani's banner closure in fiscal 2004 and factoring in the impact of the 53rd week, as well as a one-time gain on the sale of an investment in fiscal 2003, comparable earnings per share for the year will be in the range of $0.94 to $0.96.
Chief Executive Officer, Bob Sartor stated, “The quarter started well and we had a good Christmas. Our margins increased and our operating costs remained tightly controlled. And, while we are disappointed that we did not achieve our annual earnings targets, we are happy with the solid performance of the fourth quarter. That momentum has continued into the new year. While we are unhappy with the fact that we missed, what was in hindsight, a very aggressive target in the current retail environment, we view the quarter, on a stand-alone basis, as a huge success. Looking ahead, our strong balance sheet, with little debt and clean inventories, combined with a solid store expansion and renovation plan, will drive profitable sales in the current fiscal year and, we believe, further industry consolidation in fiscal '05. We remain focused on executing the strategies that we have previously elaborated. We are firmly committed to our value creation strategy despite any market challenges that may arise.”
Retail system sales for the quarter and year ended February 1, 2004 are shown in the table below.
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($ in millions) Q4 % Fiscal year %
(unaudited) Chg Chg
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F04 F03 F04 F03
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Retail System Sales
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(52 weeks F04 vs.
52 weeks F03)
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Corporate $239.2 $232.9 2.7% $732.9 $703.3 4.2%
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Franchise 123.4 102.4 20.5% 374.7 333.7 12.3%
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Total $362.6 $335.3 8.2% $1,107.6 $1,037.0 6.8%
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(52 weeks F04 vs.
53 weeks F03)
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Corporate $239.2 $244.5 (2.2%) $732.9 $715.0 2.5%
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Franchise 123.4 118.0 4.6% 374.7 338.4 10.7%
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Total $362.6 $362.5 0.0% $1,107.6 $1,053.4 5.1%
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Comparable Store Sales
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(52 weeks F04 vs.
52 weeks F03)
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Corporate $215.7 $214.1 0.7% $639.0 $645.7 (1.0%)
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Franchise 111.9 100.1 11.7% 340.9 323.4 5.4%
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Total $327.6 $314.2 4.2% $979.9 $969.1 1.1%
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(52 weeks F04 vs.
53 weeks F03)
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Corporate $215.7 $225.0 (4.1%) $639.0 $658.9 (3.0%)
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Franchise 111.9 115.4 (3.1%) 340.9 328.0 3.9%
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Total $327.6 $340.4 (3.8%) $979.9 $986.9 (0.7%)
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Total unaudited revenues for the quarter, defined as retail system sales
from the Company's corporate stores plus wholesale sales to its
franchisees were as follows:
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($ in millions) Q4 % Fiscal year %
(unaudited) Chg Chg
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F04 F03 F04 F03
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Consolidated Revenues
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(52 weeks F04 vs.
52 weeks F03) $280.9 $266.4 5.4% $968.1 $906.4 6.8%
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(52 weeks F04 vs.
53 weeks F03) $280.9 $283.8 (1.0%) $968.1 $923.8 4.8%
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