Sport Chalet, Inc. narrowed its losses to $900,000 for the third quarter ended Dec. 26, 2010, compared to a loss of $3.8 million in the prior year quarter. The company also reduced the outstanding balance on its revolving credit facility to $41.9 million from $56.2 million a year earlier – a $14.3 million reduction. On Dec. 26, 2010 the company had $27.0 million of availability.
Sales slightly increased 0.6% to $95.8 million for the third quarter of fiscal 2011 from $95.3 million for the third quarter of fiscal 2010. The increase reflects improvements in the company’s ECommerce and Team Sales divisions, partially offset by a 0.4% decrease in comparable store sales. The comparable store sales decrease is the result of a reduction in promotional activity and continuing macroeconomic weakness, partially offset by favorable weather experienced in the company’s markets.
Gross profit as a percent of sales increased to 27.5% from 25.2% for the third quarter of last year, primarily due to a decrease in markdowns from promotional activity and lower rent expense from successful negotiations with landlords. Selling, general and administrative expenses (SG&A) as a percent of sales increased to 25.3% from 23.1% in the same period last year, primarily reflecting an increase in labor for store payroll in anticipation of stronger sales than experienced. Depreciation declined as a percent of sales to 2.6% from 3.4%, primarily due to impairment charges incurred in the previous two fiscal years, as well as lower capital expenditures with no new store openings or remodels. The company recorded an income tax benefit from a change to the net operating carryback regulations in the third quarter ended Dec. 27, 2009, while no provision was recorded.
On a per share basis, the company’s net loss for the quarter was reduced to 6 cents per share compared to 27 cents per share in the third quarter of 2009.
13 weeks ended | 39 weeks ended | |||||||||||||||
December 26, 2010 | December 27, 2009 | December 26, 2010 | December 27, 2009 | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Net sales | $ | 95,828 | $ | 95,258 | $ | 264,278 | $ | 263,472 | ||||||||
Cost of goods sold, buying and occupancy costs | 69,464 | 71,240 | 190,366 | 193,633 | ||||||||||||
Gross profit | 26,364 | 24,018 | 73,912 | 69,839 | ||||||||||||
Selling, general and administrative expenses | 24,226 | 21,988 | 67,706 | 63,991 | ||||||||||||
Impairment charge | – | 10,935 | – | 10,935 | ||||||||||||
Depreciation and amortization | 2,456 | 3,192 | ||||||||||||||
