Galyans, like so many others in our space, had strong profits on weak sales in the fourth quarter ended February 1, 2003. And like so many other retailers — given the economy and world events — they were unable to give sales guidance for the first quarter of 2003.
Regardless of the question marks surrounding the near-term future, GLYN saw shares rise 10.1% for the week to close at $11.10 on Friday.
For the 2002 fiscal year, net sales rose 23.9% to $597.7 million versus $482.5 million last year.
Galyans comparable store sales increased 0.5%. The increase in comparable store sales was primarily driven by higher sales in the winter sports, athletic apparel, athletic footwear and accessories categories. Sales were weak in casual apparel and footwear.
Stores in IN, OH, DC and GA performed well, while sales were difficult in CO, KS and MN.
Earnings jumped fourfold to $18.7 million, or $1.09 per share, from $4.6 million, or $0.32 per share, last year.
Gross margin was 30.4%, up 40 basis points from 30.0% in fiscal 2001. Increased marketing expenses associated with new stores and new markets led SG&A 30 basis points higher as a percentage of sales. Operating income as a percentage of sales remained constant at 5.5% for both fiscal 2002 and fiscal 2001.
Inventory was up 24%, or up 21% when adjusted for new stores not yet open. On an adjusted basis, inventory was down 10% per store and down 8% per square foot. Turns were flat at 3.0x on an adjusted basis.
Transactions grew 25.7% as average sales fell 3% to $62.39, with 2.5 units per transaction.
“While new-store openings are a cornerstone of Galyan’s growth strategy, we are equally focused on maximizing the performance of our existing stores,” CEO Bob Mang said in a release.
Galyan’s opened nine stores in 2002, compared to five in 2001. Nine openings are planned for the 34-store chain this year. Galyan’s also said Thursday that it will build its first metropolitan New York store — at Roosevelt Field Mall in Garden City, NY.
GLYN forecast fiscal 2003 earnings of between $1.25 and $1.30 per share, with the high end of the forecasted range assuming stabilization in the economic and political environment. The company expects full-year sales in a range of $740 million to $750 million on “essentially flat” same-store sales.
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