Galyan’s Trading Company, Inc. reported net net sales for the first quarter were $129.6 million, representing a 14.2 percent increase over the same period last year. Comparable store sales for the first quarter declined 6.3 percent. Increased comparable store sales in hunting, footwear, and team sports were more than offset by softness in casual apparel, outerwear and camping categories.
Due to the steeper decline in comparable store sales and higher markdowns due to competitive promoting than originally anticipated, the Company has revised its guidance for the first fiscal quarter of 2003 to ($0.12) to ($0.14) per diluted share from our previous guidance of ($0.08) to ($0.12) per diluted share. Higher markdowns were taken during the first quarter to better manage our inventory levels. Both previous and new guidance does not quantify any potential impact of the Company’s required adoption of EITF 02-16 which addresses the classification of cash consideration received from vendors as either a reduction to advertising expense or an adjustment to cost of sales.
Robert B. Mang, Chief Executive Officer and Chairman of the Company, commented, “The first quarter has presented a challenging environment for retail sales due to the war and a sluggish economy. Also, the first quarter historically has been the most sensitive to sales levels and represents the smallest quarter as a percent of the total year. In addition, the anniversary of the 2002 Olympics, at our Salt Lake City store, had an estimated negative impact to the total first quarter comparable sales of approximately 1.3 percent.”
Mr. Mang continued, “While we are disappointed with our sales performance for the first quarter, we have managed our expenses to mitigate some of the impact of the lower sales. Furthermore, we are pleased with the recent comparable store sales trends during the last several weeks of April which were in the positive low single digit range.”