Sport Chalet, Inc. reported year-to-year comparable store sales growth of 6.8 percent for the fourth quarter ended March 31, enabling it to post its first fiscal year of comp growth since 2007.


 

Sales reached $87.8 million for the 13 weeks ended March 31, 2013, up 7.2 percent from the 13 weeks ended April 1, 2012. The increase was primarily due to the comparable store sales increase, while sales for Team Sales Division and online increased 23.1 percent and 20.0 percent, respectively.

 

 

The company attributed the comp store growth to more favorable winter weather compared with the fourth quarter of 2012, when comp store sales declined 5.3 percent.

 

 

Gross profit increased 21.4 percent to $4.2 million, or 27.0 percent of sales, up 310 basis points from the year earlier quarter. The increase was primarily due to higher sales, lower markdowns and increased winter rentals and repairs, which have higher margins.

 

 

Selling, general and administrative (“SG&A”) expenses increased $2.4 million, or 11.5 percent, or 26.5 percent of sales, up 100 bps. The increase included $800,000 in labor, $300,000 in advertising and $800,000 in expenses related to the growth of the Team Sales Division, including operations of a new computer system.

 

 

Net loss for the quarter decreased $1.5 million to $2.3 million, or 16 cents per diluted share, from a net loss of $3.8 million, or 27 cents per diluted share in the quarter ended April 1, 2012. While it marked the fourth consecutive year of losses at the company, CEO Craig Levra said the company is focused on positioning itself to capitalize on rising consumer confidence, which reached its highest level in six years in May.
 

The economy does appear to be headed in the right direction, yet the momentum we are seeing in our business continues to be somewhat inconsistent, said Levra. Over the past several months, we have been refining our strategic plan to position Sport Chalet to fully capitalize on the recovering economy and to generate more consistent, steady growth.

 

 

Initiatives include the launch this summer of a 27,000-square-foot next-generation store in Los Angeles that, if successful, will significantly expand the number and types of markets where SPCH can operate stores profitably. The companys 53 stores, which are located in Arizona, California, Nevada and Utah, now average 40,000 square feet.

 

Online, SPCH is expanding the amount of products customers can order direct from vendors through drop shipment programs. This enables SPCH to expand its online catalog and grow its top line sales with no inventory risk in exchange for significantly less margin.

 

After six years of investing in technology, including an SAP conversion at Team Sales, SPCH is focusing on how to harness data collected through its Action Pass loyalty program, online sales and other sources to personalize offers and tailor each stores merchandise mix. In fiscal 2013, SPCH added 400,000 new Action Pass members, who spend 65 percent more per transaction at Sport Chalet than other customers. Levra attributed much of the robust growth in Team Sales in 2013 to upgrades that make it much easier for teams to order custom gear online. The retailer has begun offering Order Today/Deliver Today services in all four states where it operates stores. Finally, SPCH is boosting investment in grassroots marketing program.