Gander Mountain lowered its outlook for pretax income for fiscal 2004 to a range of $2.0 million to $4.0 million, compared with the company’s prior guidance of $8 million to $13 million. The company reported pretax income of $1.5 million in fiscal 2003. The company also said that it expects comparable store sales for the current fiscal year to be down 2% to 3%. Last year’s comparable store sales increased 11.5%. Total revenue for the 2004 fiscal year is expected to be in the range of $640 million to $645 million, an increase of approximately 31% over revenue of $489 million in the prior year.
The company expects total revenue in the fourth quarter to increase approximately 31 percent to $236 million to $241 million, reflecting the addition of new stores and a comparable store sales decrease of approximately 6 percent. Comparable store sales increased 12.2 percent in the fourth quarter of fiscal 2003. The company expects to report pretax income of $17.2 million to $19.2 million in the current quarter, compared to $12.8 million in the fourth quarter of last year, a 34 percent to 50 percent increase.
In revising its outlook, the company cited the continuing impact of unseasonably warm weather into mid-December. Despite improvements in sales after the weather normalized, sales have not met the company’s expectations. As a result, the company increased post-holiday promotional activity in an effort to reduce inventories to comparable year-end levels. The results of these promotions will negatively impact the current quarter’s gross margin rate.
“Although we are disappointed in not achieving our financial targets, we accomplished much in 2004 and look forward to improved performance and profitable growth in 2005,” said Mark Baker, president and CEO.
