Citing softness in its direct businesses, primarily catalog and e-commerce, and a slower start to the spring season for its retail stores, Golf Galaxy, Inc. warned the street that it would not achieve the guidance it had previously set.
GGXY shares were down 20% for the week to close at $16.59 on Friday.
The company now anticipates net sales of $82 million to $83 million on a flat to 2% comp sales gain for the first quarter of fiscal 2007. Previously, Golf Galaxy had given guidance planning for net sales in the range of $84 million to $88 million.
Accompanying the decrease in sales guidance, the company narrowed its estimate for first quarter net income to $2.2 million to $2.5 million, or 19 cents to 22 cents per diluted share. The company’s previous guidance for first quarter net income was $2.0 million to $2.5 million, or 17 cents to 22 cents per diluted share.
Based on its new outlook for the first quarter, the company also revised its guidance for the fiscal year ending March 3, 2007. The company now expects net sales of $300 million to $310 million including a comp sales gain of 5% to 7% for the year, compared with its prior estimate of $305 million to $315 million. Golf Galaxy had previously announced an expected comparable store sales gain of 6% to 8% for fiscal 2007.
The company reiterated its expectation for fiscal 2007 net income of $7.5 million to $8.1 million or 65 cents to 70 cents per diluted share.