Golfsmith International Holdings, Inc. reported that it expects to record diluted earnings per share in the range of 13 cents to 16 cents for fiscal 2007. The currently anticipated range is well below previous guidance of 31 cents to 35 cents earnings per diluted share. The company attributed its guidance miss to lower than expected sales coupled with increased price discounting during December that impacted gross margins and the company's earnings.
Additionally, for fiscal 2007, the company expects to report revenues of approximately $388 million, an increase of 8.4% over the $357.9 million reported for fiscal 2006. This result suggests that fourth quarter revenues will amount to $78.8 million, increasing 5.1% from fourth quarter 2006 revenues of $75.0 million. Comparable store sales for the year declined approximately 3.7%.
Aside from its earnings estimate, Golfsmith also announced that its CEO, James D. Thompson has resigned from his position to pursue other interests. The board of directors has appointed chairman Martin Hanaka as the company's interim CEO.
“On behalf of the Board, I want to thank Jim for his considerable contribution to the company and wish him the best in his future endeavors,” said Mr. Hanaka. “I look forward to working with the Golfsmith team as we move forward with the companys business plan and as we look to find a permanent Chief Executive Officer who will provide strong leadership for the company.”
Mr. Hanaka became the chairman of the board of Golfsmith in April 2007. He was the chairman of the board of The Sports Authority, Inc. from November 1999 until June 2004 and was its CEO from September 1998 until August 2003. Mr. Hanaka joined The Sports Authority, Inc.s board of directors in February 1998. From 1994 to 1997, Mr. Hanaka served as president, COO and a director of Staples, Inc. Mr. Hanaka currently serves on several other public and private company boards.
The company also announced that it expects to incur a one-time charge of approximately $800,000 in the first quarter of fiscal 2008 associated with Mr. Thompsons separation package.
Commenting on the fiscal full year result, Hanaka stated: “As we have previously stated, our business is seasonal, with both Father's Day and the December gift-giving seasons contributing a higher percentage of our annual net revenues and annual net income than other periods. While macroeconomic conditions were not in our favor and impacted our business, particularly with poor sales in December, we are committed to our long term strategy. We are moving forward with our business plan for 2008 while also focusing on expenses and margins.”