The Sports Authority, Inc. expects to report a same-store sales decline of 4% to 5% and fully diluted earnings per share of 41 cents to 48 cents, excluding merger integration costs, for the second quarter of fiscal 2004. This compares to the Company's previous second quarter guidance of flat same store sales and fully diluted earnings per share of 70 cents, excluding merger integration costs.
Doug Morton, Chairman, President and Chief Executive Officer commented, “Our sales results for the quarter were negatively impacted by the unusually cool and wet weather in many of our key markets. In particular, the more seasonal outdoor categories under-performed expectations while footwear was generally on plan. We are also continuing to experience a slow-down in sales of fitness equipment. Despite these challenges, we continue to make progress in many of our initiatives. We are pleased with the initial success of our store remodel program in the Company's Sports Authority store locations where the incremental sales increase experienced in the twenty-seven remodeled stores since the merger has approximated seven percent. In addition, our gross margin rate continues to trend positively compared with last year's combined company rate.”
Mr. Morton continued, “We remain cautiously optimistic about the third and fourth quarters due to continued progress on the store remodel and gross margin initiatives as well as the transition to fall and winter merchandise assortments. The third quarter will be the first quarter since the merger that we will have complete cold weather assortments, including ski and snowboard equipment, apparel and accessories in the Company's Sports Authority stores. The Company plans to provide updated guidance for fiscal 2004, as well as guidance for the third quarter, when it reports complete results for the second quarter on August 26, 2004.”
Guidance Ranges for the Second Quarter ended July 31, 2004:
- Fully diluted EPS before merger integration expenses $0.41 – $0.48
- Per share merger integration expenses, tax affected $0.16 – $0.18
- Fully diluted EPS as reported $0.23 – $0.32