Gander Mountain Company reported sales and earnings results for the first time as a public company, but the earnings picture that looked brighter at year-end just before its very strong IPO fell back into the red again as the net loss widened more than 21% to $13.6 million for the quarter versus $11.2 million in the year-ago period. The pro forma loss per share was 89 cents, flat to last year.
GMTN traditionally only sees 14% to 15% of its sales in the first quarter of each year and profits were back-loaded in 2003. The business may be shifting a bit as the retailer continues to add more “warehouse” format stores that have bumped the average square footage for each store to 40,800 square feet from just 32,600 last year. All stores will be the warehouse format going forward, which are generally in the 50,000 sf to 90,000 sf range, including the 15 stores planned for this year.
The addition of more stores in southern states, especially Texas, will also help the Q1 period going forward as Mark Baker, Gander president and CEO, pointed out that the consumer there is gearing up for fishing there much earlier than the northern states.
The change in store size and format had also led to an increase in sales per square foot, which is up 8.3% to $221 for the training 12 month period versus $204 in the previous 12 month timeframe.
Customer transactions grew 33% to 2.1 million in the quarter and the average ticket increased 6% to $46.90 versus $44.20 in Q1 last year. The average ticket in the warehouse stores was $55 versus $44 in the smaller format stores.
Gander said they had double-digit gains in all categories in Q1, with strength in hunting, apparel, and footwear.
Fishing, marine, and camping showed gains, but lagged the key categories at Gander Mountain in Q1.
Gross margin was positively impacted by stronger sales in softlines and private label brands, but were offset by higher sales in the lower margin hunting and ATV categories. The change in the way certain vendor contracts are handled added 60 basis points to the GM line but also impacted the SG&A line by 190 basis points. GMTN estimates the total impact of the change was $1.8 million.
Sales for the year are estimated to be in the $650 million to $700 million range, an increase of 33% to 43% over fiscal 2003. Comps are seen increasing in the 3% to 5% range. Pre-tax income is expected to be $16 million to $21 million, compared with $1.5 million in fiscal 2003.