Golfsmith International Holdings posted double-digit sales growth for the third quarter as the addition of 15 new stores in the trailing 12 months and the extended warm weather selling season boosted top line growth despite a slight downturn in quarterly comparable store sales. On a conference call with analysts, GOLF management said that while overall comps declined 0.2% for the quarter, the retailer saw 14 of its 20 markets comp positive.

Management attributed the decrease in the direct business to declines in club making sales and reduced circulation in its consumer business. The company said that it feels the club making business has bottomed, though.  Looking at Holiday sales, GOLF expects technology to be very hot, noting that the “golf electronics business is nearly doubled year-over-year,” according to CEO Jim Thompson.

The gross margin gains were partially offset by a 40 basis point increase in SG&A expenses to 30.6% as a result of the 15 new stores.

Looking ahead, Golfsmith reiterated its expectations for full year comparable store sales of negative 3.0% to negative 2.0% and diluted earnings per share to be between 30 cents and 35 cents.

The company has opened 12 stores year-to-date and will open its 13th and final store for fiscal 2007 later this week in Raleigh, NC bringing the national store count to 74. The new store will be 60,000 square foot and the largest store in the company’s national network.

Management said the Raleigh store will feature new brand partners, such as Puma, Lacoste, EZ-GO and Crocs and new categories like golf fitness equipment, casual and lifestyle apparel, golf carts, and golf theme furniture.  This new door is quite a jump from past stores, which typically were approximately 25,000 square feet.  Paradoxically, after opening this largest store, the company plans to slow square footage growth next year from the 26% growth seen for fiscal 2007.