Golfsmith first quarter net revenues increased by $10.8 million, or 17.0%, to $74.8 million from $64.0 million in 2005. The increase was mostly comprised of a $5.2 million, or 12.3% increase in comparable store revenues and an increase in non-comparable store revenues of $5.0 million.
Additionally, the company experienced an increase in direct-to-consumer revenues of $400,000, or 1.8%, as well as an increase in our international revenues of $0.2 million, or 16.6%.
The company's first quarter net loss was more than halved to $869,000 compared to a loss of $2.0 million last year.
Growth in comparable store revenues was driven by a $4.2 million increase in golf club sales, which are higher priced products than other products we sell. Additionally, four stores entered the comparable store base for the first time during the three months ended April 1, 2006, contributing $900,000 to the increase in comparable store sales. The company believes this growth was positively affected by continued high levels of consumer confidence and the continued effects of executing our business strategy. They also believe that comparable store revenues continued to be negatively impacted by increased competition in select markets. In comparison, comparable store revenues for the three months ended April 2, 2005 decreased by $3.2 million, or 8.1%, compared to the first fiscal quarter of 2004.
Non-comparable store revenues primarily include revenues from six stores in operation that were opened subsequent to April 2, 2005 and one store that became comparable during the three months ended April 1, 2006, but which contributed $200,000 in non-comparable store revenues during the three months ended April 1, 2006.
Gross profit increased by $3.0 million, or 13.4%, to $25.8 million in Q1 2006 from $22.8 million in Q1 2005. Increased net revenues led to higher gross profit for the three months ended April 1, 2006. Gross profit was 34.5% of net revenues in 2006 compared to 35.6% of net revenues in 2005. The decrease in gross margin percentage was primarily due to increased sales of lower margin product during the three months ended April 1, 2006. Additionally, increased distribution costs relating to our receiving and shipping of products, mainly related to promotional shipping terms offered to our guests, as well as increased freight costs due to rising gas prices accounted for decreases in gross profit of $1.3 million during the three months ended April 1, 2006 as compared to the three months ended April 2, 2005. These declines in gross profit were partially offset by increases in vendor allowances of $700,000.
Selling, general and administrative expenses increased by $2.3 million, or 10.8%, to $23.7 million from $21.4 million in 2005. SG&A expenses were 31.7% of net revenues compared to 33.5% of net revenues in 2005. The increase in SG&A expenses resulted from an increase of $600,000 related to comparable stores, an increase of $1.5 million related to non-comparable retail stores and an increase of $200,000 related to our consumer direct channel, corporate and international operations.
The increase in comparable retail store expenses of $600,000 was largely due to increases in variable expenses, including increases in advertising expenses of $200,000 and increases in payroll and general store operating expenses of $200,000.
The increase in non-comparable retail store expenses of $1.5 million was mainly related to the opening of six new stores during fiscal 2005 and was comprised of $800,000 in fixed expenses, including occupancy and depreciation costs and $0.7 million in variable expenses, consisting mainly of payroll and advertising. The increase of $0.2 million related to our consumer direct channel, corporate and international operations was primarily related to an increase of $0.5 million in variable expenses consisting mainly of payroll and advertising offset by a decrease in professional services of $0.4 million.
Store pre-opening expenses decreased by $300,000, or 61.3%, to $200,000 in the three months ended April 1, 2006 from $500,000 in the three months ended April 2, 2005. During the three months ended April 1, 2006, the company incurred $200,000 related to the planned opening of four new retail locations during the second fiscal quarter of 2006. During the three months ended April 2, 2005, the company incurred $500,000 related to the opening of one new retail location and the planned opening of five new retail locations during the second fiscal quarter of 2005.
Other income increased by $300,000 to $322,000 in the three months ended April 1, 2006 from $23,000 in the three months ended April 2, 2005. The increase resulted from declared settlement income resulting from the Visa Check / MasterMoney Antitrust Litigation class action lawsuit, in which the company was a claimant, related to the overcharging of credit card processing fees by Visa and MasterCard during the period October 25, 1992 to June 21, 2003.
Other expense increased by $19,000 to $43,000 in the three months ended April 1, 2006 from $24,000 in the three months ended April 2, 2005. The increase resulted from foreign exchange losses.
