Golfsmith International saw net income for the third quarter fall 70.6% to $1.1 million from $3.4 million in the year-ago period. Net income from U.S. operations contributed 85.3% of total earnings, while Canada operations contributed 10.4% and Europe provided 4.3% of net income for the quarter.
Net revenue increased 27.1% to $71.1 million from $56.0 million. The U.S. business was $68.7 million, or 96.6%, of sales while Canada contributed 1.3% of sales and Europe represented 2.1% of sales for the quarter. Comparable store revenue increased 12.6%. The balance of the increase came from 12 stores either opened or acquired, including the six Don Sherwood Golf and Tennis stores acquired in July 2003, and a 3.5% increase in the direct-to-consumer business.
Gross margins narrowed 180 basis points to 32.9% versus 34.6% in Q3 LY, due primarily from “higher sales in lower margin merchandise categories such as equipment” and “multiple sales promotions” during Q3.