Sport Chek, Canada’s largest sporting goods chain, saw a rare quarterly sales decline, with same-store sales dropping 4.3 percent in the first quarter.
Said Stephen Wetmore, president and CEO, on a conference call with analysts, “Typical activity patterns were disrupted by a warmer January and February and a colder March across the country.”
Overall, FGL Sports’ retail sales were down 1.4 percent and same-store sales were down 2.7 percent in the first quarter. Beyond Sport Chek, FGL Sports’ banners include Atmosphere, Sports Experts, Hockey Experts, National Sports, Intersport and Pro Hockey Life.
The comp decline comes after Sport Chek’s comps climbed 4.9 percent in the fourth quarter and 7.6 percent overall in 2016. The business has delivered consistently strong growth in recent years since Canadian Tire acquired Forzani Group in 2011.
Duncan Fulton, president, FGL Sports, said on the call that winter jackets and winter boots categories were down as markdowns were used to clear merchandise starting in January with the warm weather. But most of Sports Chek’s top categories showed gains in the quarter, including athletic, hockey, accessories, licensing and ski/snowboard. With the colder weather in March, however, spring running gear and shoes also “just didn’t trigger as quickly,” added Fulton.
He said Sport Chek continues to work on reducing its dependency on weather patterns.
“There is always going to be a seasonal component to what we do,” said Fulton. “Some of the efforts you are going to see us make are in kids and women lifestyle categories that are more year-round categories – those are specifically designed to smooth out some of those valleys, which none of us like to see. But I have no doubt at all and we have seen it consistently that at those key times of the year and at those key weather triggers, we are the leading market share in Canada in all of those categories that Sport Chek plays in.”
Canadian Tire officials also indicated that despite the sales decline, FGL Sports’ inventory levels improved year over year due to adjustments to buys coming into the winter season.
Wetmore also said the slowdown in the quarter shouldn’t be seen as an indication that FGL’s sales momentum will be slowing in the quarters ahead. He said some slowing should be expected with FGL having completed its five-year plan, 2 million-square-foot real estate expansion over the last few years.
“However,” he added, “many of the operational initiatives put in place at Canadian Tire Retail and now being implemented at FGL as we move to Phase two of FGL’s growth agenda. FGL completed the rollout of the new point-of-sale system in Q1 and are now live with their distributed order management system. So I believe Duncan and team now have the foundation that the company has needed.”
Photo courtesy Canadian Tire
