Many of the trends evident in the preceding reporting period resurfaced for the fiscal fourth quarter for retailers – retailers continued to ramp up inventories while striving to maintain margins by focusing on full-priced goods, cost cuts and resourceful marketing initiatives. 


As a whole, industry retailers saw sales increase in the mid– to high-single-digits for the period and healthy gross margin gains helped bolster bottom-line growth as well. Return on Sales for the retailers covered in the chart on page 5 climbed 180 basis points to 5.6% of sales – the best fourth quarter ROS performance since 2006.

 

Profit growth outpaced top-line sales growth by a 13:1 margin in Q4.
Fourth quarter results are posted for those companies that have reported for the period ended closest to the January 29, 2011.  Still, because the report is not a clear picture of the entire industry, SEW feels the total numbers are less significant than the trending information provided in the percentage increases and decreases.  The SportsOneSource Group does a broader analysis of the industry each quarter by comparing vendor wholesale performance against retail sales performance based on data provided through SportScanINFO. The SportsOneSource Market View 2010 Report reflecting both wholesale and retail performance of brands will be available in May.


Consolidated retail sales for the retailers tracked each quarter by Sports Executive Weekly improved a healthy 6.4% during the quarter, buoyed by high-single-digit growth in the two largest retail sectors by volume – Specialty and Sporting Goods. Those sectors also contributed to an average consolidated margin expansion of 210 basis points, easily offsetting a 20 point margin decline in the Family Footwear sector. Earnings for all reporting retails improved by more than half, with the average profit line of both the Specialty and Sporting Goods sectors improving by more than 60% during the quarter.


Sequentially, while fiscal Q3 rode a stronger-than-expected back-to-school season to almost twice the sales growth of Q4, earnings for the fourth quarter outpaced Q3 earnings by an average of 14 percentage points.


The only comp store sales decline in Q4 came out of Southern California-based retailers and Genesco’s Underground Station unit.
For the Specialty Sector, same-store sales growth was well off the pace of Q3, but margins improved an average of 420 basis points as retailers sold more full-priced items. Among the headliners, Adidas’ retail sector saw sales jump by more than a third  on strong returns from the North America, Europe and Greater China markets while red-hot Lululemon continued it’s dominance of the yoga lifestyle market on sales that increased by half and comps that surged almost 30%. Earnings for Lululemon nearly doubled during the quarter and the company added 12 new stores during the fiscal year.


Total sales for the Sporting Goods sector also posted solid growth for the quarter despite a relatively strong year-ago period. Among the top performers for the quarter, Dick’s SG saw sales surge nearly 14% and earnings soar 30% on strong sales of apparel and footwear and a better online presence during the holiday season. At Forzani, sales grew 15.5% in constant-currency terms and earnings improved 10% on strong returns from key hardgoods categories and solid sales from winter categories. At Cabela’s, solid comp growth and a 14% jump in profit stemmed from lower impairment charges compared to a year-ago period that slumped on steep charges and liquidation costs.


At Hibbett Sports, double-digit sales growth from the prior-year quarter yielded to a more-moderate 3.8% improvement in Q4, but management noted that delays forced by late winter storms and later tax refunds have already paid off for Q1 2011.