Sport Chalet Inc. warned investors it would turn in a dismal performance for the fourth quarter as sagging housing values in California, Arizona and Nevada continued to suppress spending.
The retailer said it expected fourth quarter net sales to hold essentially flat at $97 million, but comparable store sales would likely decline approximately 9.0% from the same period a year ago. In addition, the company expects to record a net loss for the quarter in the range of 20 cents to 25 cents per diluted share compared to 6 cents per diluted share last year.
Because Sport Chalet had anticipated a tough quarter due to rising competition, its own backfilling strategy and a tough economy, it deeply discounted merchandize to drive sales and reduce winter inventory. Still, the company felt compelled to update its guidance for the year.
For fiscal 2008, SPCH now expects to report a 3.8% increase in net sales to about $403.0 million from $388.2 million for the same period last year. Comparable store sales for the full year are expected to decline approximately 5%. As recently as Dec. 30, the companys guidance called for a comp store sales decline in the range of 2% to 4% for the year.
The retailer anticipates a fiscal 2008 loss per diluted share in the range of 24 cents to 29 cents compared to earnings per diluted share of 50 cents in the prior year.
Company Chairman and CEO Craig Levra said he expects the difficult market conditions to continue into fiscal 2009, which started April 1.
