The Sportsman's Guide reported third quarter sales and earnings that hit the upper end of their recently upgraded guidance, posting net income of $710,000, or 13 cents per diluted share, on sales of $41.2 million, or a 12.3% increase over the year-ago period. Earnings jumped 164% for the period.
The sales increase was again attributed to a growing Internet business that also help sustain margins. Internet sales were 36%, or roughly $14.8 million, of total sales in Q3 compared to 30%, or approximately $11.0 million, in the year-ago quarter. The increase amounted to a 34.5% jump in Internet related sales. SGDEs recently-announced deal with Amazon.com is expected to fuel the Internet business further.
The 30.4% gross margin in the quarter, which was flat to last year, was aided by a “minor improvement” in product margin gains, offset by higher shipping costs.
The Internet business has also enabled SGDE to lower ad expense to 15% of sales versus 16.4% of sales in the year-ago period. Inventory grew 5.7% versus the quarter-end last year, due mainly to “opportunistic” buys that should help margins in Q4.
For the year, SGDE said they are “comfortable” with consensus earnings estimates of $1.00 to $1.10 per share. Sales are seen in the $190 million to $195 million range versus year-ago sales of $179 million.
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