Gander Mountain lowered its outlook for pretax income for fiscal 2004 to a range of $8 million to $13 million, compared with the company's prior guidance of $16 million to $21 million. The company reported pretax income of $1.5 million in fiscal 2003. The company also said that it expects its comparable store sales comparison for the year to be slightly negative, versus prior guidance of a three- to five-percent gain. Last year's comparable store sales increase was 11.5 percent. Total revenue for the 2004 fiscal year is now expected to be in the range of $640 million to $670 million, compared with $490 million in the prior year.
The company expects to report that total revenue in the third quarter increased 24 percent to approximately $178 million, reflecting the addition of new stores, while comparable store sales declined 7.5 percent compared with an increase of 12.5 percent in the third quarter of the previous year. The company expects to report that year-to-date comparable store sales declined 0.7 percent.
In revising its outlook, the company cited weaker-than-anticipated sales, resulting in part from the impact of unseasonably warm weather on sales of outerwear and footwear. In addition, co-branded credit card promotions in 2004 were not as effective in driving sales of high-ticket items as the 2003 promotions, when the credit card program was introduced.
“We are disappointed in the sales performance of our stores. However, we expect to report modestly positive income for the third quarter as a result of reacting to the sales environment and effectively managing our operating costs and inventory levels,” said Mark Baker, president and CEO. “In addition, by the end of the third quarter we had opened 19 new stores during the year, up from our original plan of 15, and each opened on time and on budget.”