Golfsmith reported net revenues of $64.0 million, operating income of $0.8 million and a net loss of $2.0 million for the three months ended April 2, 2005 compared to net revenues of $65.8 million, operating income of $2.5 million and a net loss of $0.2 million in the three months ended April 3, 2004.
The $1.8 million decrease in net revenues for the quarter was mostly comprised of a decrease in comparable store revenues of $3.2 million, or 8.1%, a decrease in direct-to-consumer channel revenues of $2.3 million, or 10.2%, and a decrease in international revenues of $0.5 million, or 32.7%, offset by a $4.2 million increase in non-comparable store revenues. In comparison, comparable store revenues for the three months ended April 3, 2004 increased by $6.0 million, or 23.9%.
Golfsmith believes the decrease in comparable store revenues for the period was due to the strength of comparable store revenues during the year-ago quarter and was influenced by the 7.6% decrease in the number of golf rounds played in the U.S. during the three months ended March 31, 2005 as compared to the same period in 2004, as reported by Golf Datatech. Non-comparable store revenues primarily include revenues from five stores in operation that were opened subsequent to April 3, 2004. The decrease in direct-to-consumer channel revenues was primarily due to planned reductions in catalog circulation intended to improve direct-to-consumer channel profitability.
The decrease in international net revenues was primarily due to the sale of the rights to a trademark in fiscal 2004. Sales of products using this trademark contributed approximately one-half of international net revenues during the three months ended April 3, 2004 but did not contribute any international net revenues during the three months ended April 2, 2005.
For the first quarter, gross profit was $22.8 million, or 35.6% of net revenues, compared to $23.0 million, or 35.0% of net revenues, for the first quarter of 2004. Decreased net revenues led to the lower gross profit. The increase in gross margin percentage is the result of the company realizing economies of scale due to continued retail store growth, which has allowed us to purchase product in higher volumes with more favorable pricing.
Selling, general and administrative expenses increased $1.2 million to $21.4 million for the first quarter from $20.2 million for Q1 2004. Increased selling, general and administrative expenses was attributed to an increase in expenses of $2.1 million related to general operations for non-comparable retail stores and an increase of $0.4 million for corporate and international expenses, offset by a decrease of $1.3 million related to general operations for existing retail stores.
