Golfsmith International Holdings, Inc., reported third quarter sales slid 4.5% to $101.7 million compared with net revenues of $106.5 million a year earlier. Comparable store sales decreased 4.6% and net revenues from the direct channel decreased 11.6%. Net income fell 30% to $2.8 million, or 17 cents a share, from $4.0 million, or 25 cents, a year ago.
Martin Hanaka, chairman and CEO of Golfsmith, commented, “We had a good start to the third quarter as we made every effort to overcome the consumer headwinds by emphasizing our selling and service culture and through the tactical use of promotions. However, sales trends slowed dramatically in September as the economic environment deteriorated and the hurricanes hit key areas of Texas and Florida. Looking ahead, we will continue to focus on expense controls and inventory management as well as carefully execute promotions.”
Year-to-Date Results
* Net revenues totaled $310.9 million compared with net revenues of $309.2 million for the nine-month period ended Sept. 29, 2007.
* Operating income was $8.9 million compared with operating income of $8.7 million for the nine-month period ended Sept. 29, 2007. Operating results included a $1.8 million charge, or 11 cents per diluted share, associated with organizational changes in the current year.
* Net income totaled $6.0 million, or 37 cents. This was basically flat with net income of $5.9 million, or 37 cents, the prior year.
The company noted that there were no store openings or closings and one store relocation in the third quarter of fiscal 2008. As of Sept. 27, total inventory was $86.6 million as compared to $91.7 million at Sept. 29, 2007 and average comparable store inventory remained relatively flat.
Regarding its outlook, Golfsmith said, that “based on the current volatility of the economy, it is difficult to predict sales for the fourth quarter. We will continue to aggressively manage our costs and inventory, and we will remain focused on near term execution.”
