Sport Chalet Sees 3.1 Percent Q2 Comp Gain

The increase in comparable store sales and online sales was offset by a decrease of $2.5 million due to a calendar shift, causing total sales to decrease 0.9 percent to $88.0 million for the second quarter of fiscal 2012 from $88.8 million for the second quarter of fiscal 2011. The impact of the calendar shift is primarily the result of the Fourth of July weekend being included in the first quarter of fiscal 2012 compared to the second quarter in fiscal 2011.

Gross profit as a percent of sales increased to 29.2 percent from 28.2 percent for the second quarter of last year primarily due to a decrease in markdowns, as a result of a change in promotional strategy related to the Labor Day weekend, and an improvement in inventory shrinkage. Selling, general and administrative (SG&A) expenses as a percent of sales slightly increased to 25.4 percent from 25.2 percent in the same period last year, primarily due to the decrease in leverage from the decline in total sales.

The  company's net income for the quarter ended Oct. 2, 2011 increased by $1.1 million to $0.6 million, or $0.04 per diluted share, from a net loss of $0.5 million, or $0.04 per diluted share, for the quarter ended Sept. 26, 2010.

“This quarter marked our second profitable quarter in the last three quarters and we continued to experience positive trends in comparable store sales and online sales,” said Chairman and CEO Craig Levra. “We continued our investment in training so our Experts can effectively sell our first to market performance, technology and lifestyle merchandise. Our data suggests our online business is helping drive customers into our stores, while establishing a national footprint online. Additionally, our database has grown to over 1.5 million Action Pass members. We are excited about the considerable improvement of our results which demonstrates the effectiveness of our strategies designed to return our company to profitability.”

Six-Month Results

For the six months ended Oct. 2, 2012, total sales increased 1.4 percent to $170.8 million from $168.5 million for the first half of the prior fiscal year, primarily due to a comparable store sales increase of 2.7 percent and an online sales increase of 39 percent, partially offset by a calendar shift decrease of $1.2 million.

Gross profit as a percent of sales increased to 29.0 percent from 28.2 percent for the first six months of last year, primarily due to a decrease in markdowns, an improvement in inventory shrinkage and a decrease in rent expense. SG&A expenses as a percent of sales decreased to 25.7 percent from 25.8 percent a year ago.

The  company's net loss for the six months ended Oct. 2, 2011 was reduced by $2.2 million to $0.2 million, or 2 cents per share, from a net loss of $2.5 million, or 17 cents per share, for the six months ended Sept. 26, 2010.

Liquidity

On Oct. 2, 2011, the  company's bank credit facility had a borrowing capacity of $59.9 million, of which the  company utilized $43.6 million (including a letter of credit for $2.6 million) and had $16.3 million in availability.