Golfsmith did little to give the market hope for golf specialty retail last week as the retailer posted a 2.8% decrease in total sales to $64.0 million for the fiscal first quarter ended April 3, compared to $65.8 million in the year-ago period. The net loss for the period increased substantially to a loss of $2.0 million versus a loss of $203,000 in the year-ago period.
U.S. sales declined about 2% to roughly $62.9 million, while sales to international distributors fell nearly 33% to $1.1 million. The decrease in International revenues was primarily due to the sale of the rights to a trademark in fiscal 2004 that made up about half of International sales in Q1 last year.
Comp store sales declined 8.1% versus Q1 last year, a period that posted a 23.9% comp store sales gain for the retailer. Golfsmith pointed to the strong quarter last year and the reduction in golf rounds played this year as reasons for the sharp decline in comps. Superstores accounted for approximately 67.1% of total revenues in the first quarter, compared to 63.7% of net revenues in Q1 last year.
Golfsmith had 46 superstores in operation as of April 2, a net gain of four doors since the year-ago period. They opened one store and closed another in Q1 and plan to open seven to eleven new stores in the remaining quarters of the year. Golfsmith spends approximately $1.5 million to open each superstore.
Direct-to-Consumer sales fell 10.2% for the quarter. The decrease in Direct-to-Consumer channel revenues was primarily due to planned reductions in catalog circulation intended to improve channel profitability.
Gross margin appeared to be the one positive metric for Golfsmith, as margins improved 60 basis points to 35.6% of sales, compared to 35.0% in Q1 last year. The retailer pointed to increased volumes that led to better pricing from vendors as a key contributor here. Increased operating expenses partially offset the GM gain, rising 280 basis points to 33.5% of sales in Q1 from 30.7% of sales in the year-ago period.
