Though not quite keeping pace with industry vendor results, retailers tracked by Sports Executive Weekly had a terrific fourth quarter as the same ‘must haves’ that drove vendor gains (see SEW_0715) drove consumers to the mall, the strip mall, and the Internet to do their holiday shopping. As a whole, industry retailers saw sales increase in the mid-teens, with moderate margin improvements fueling a high-20s increase in net income. Return on Sales for the retailers covered in the chart on page 5 increased 90 basis points to 6.9% from 6.0% during the year-ago fourth quarter.

Fourth quarter results are posted for those companies that have reported for the period ended closest to the February 3, 2007. 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 2007 Report reflecting both wholesale and retail performance of brands will be available later this month.

Specialty retailers posted the weakest results of the group with a mid-singles sales increase derailed by a decrease in gross margins that led to a downturn in net income. As with the third quarter, Pacific Sunwear was again a big reason behind the softness at specialty. PSUN’s woes started with the middle as margins decreased over 450 basis points, causing an 80% decrease in net income. Without PSUN’s impact, specialty retailers actually saw a high-singles gain on the bottom line. On the owned-retail front, Oakley’s continued expansion of door count and acquisition of several smaller chains helped fuel sales gains, but those gains were partially offset by decreases in Timberland’s owned-retail before helping the specialty segment.

Sporting Goods retailers saw the most ‘realistic’ impressive results for the quarter as Dick’s Sporting Goods and Hibbett both posted over 20% sales gains, while West Marine’s 0.8% decrease was the only sales decline in the group leading to a mid-teens improvement for the category. DKS’ acquisition of Golf Galaxy removed the golf specialty retailer from the specialty segment, but the deal did not close until February and so had no effect on the results in this report. The bottom line growth was widespread with all of the segment’s retailers posting 20%+ increases, except for Gander Mountain, the only sporting goods retailer to see a net income decrease. Even for GMTN, the decrease was not as bad as on paper as the company took a $9 million charge related to a debt conversion. Without the charge, GMTN net income would have grown 9.5% and overall segment profits would have improved over 30%.

Catalog/Team/Web retailers posted the largest gains on both the top line and bottom with Collegiate Pacific contributing much, but GSI Commerce’s sales jumping nearly 50% and net income increasing more than five times over are the bigger story. In fact, GSIC’s bottom line improvement was so substantial that without the company included in the overall results, Catalog/Team/Web retailers saw net income increase only 16% instead of the 29% reported.

Family Footwear retailers also posted large gains on the bottom line, with Payless ShoeSource swinging to a profit this year after a net loss in the year-ago quarter. Without the gain from Payless, the 184% jump for the segment becomes a more plausible, though still impressive, mid-50’s increase. Removing both PSS and GSIC from the numbers shows industry retailers posting an 8% gain on the bottom line.