The Hockey Company Holdings, parent of the CCM, JOFA and KOHO brands, rode stronger equipment sales and some foreign exchange rate gains to higher earnings for the third quarter ended September 30, 2003. The new Canadian holding company reports figures in U.S. dollars, but due to the international nature of its sales saw the positive impact of the FX rate on sales mitigated somewhat by the negative impact on operating and other expenses.
Equipment sales increased 15% in Q3, while Apparel gained 4.0% for the period. Apparel sales were said to be flat for the nine-month YTD period, due primarily to small market teams making the playoffs last spring that impacted sales of replica jerseys.
The company said Canada and Europe continue to be strong, but the U.S. economy “provides greater challenge”.
Total sales for the third quarter rose 11.6% to $81.1 million. Gross margin improved by 20 basis points to 44.1% and net income jumped 45.2% to $8.5 million, or 71 cents per share, compared to $5.9 million, or 82 cents per share, in the year-ago period.
Net income for the YTD nine-month period jumped 631% to $13.9 million, or $1.52 per share, on sales of $171.2 million, or a 13.1% increase from the 2002 third quarter. The YTD period saw a $14 million sales gain from the FX rate benefit.
The company said they do not “foresee a change” in the difficult retail conditions in the U.S. in the fourth quarter, despite the energy most other brands have seen in the states, especially in retro licensed jerseys.
The Hockey Company in August completed the acquisition of Roger Edwards Sport Ltd., which is expected to help their position in the “retro-inspired apparel segment”.