The Sports Authority, Inc. announced results for its first fiscal quarter ended April 30, 2005. Net income for the first quarter was $8.0 million, or 30 cents per diluted share compared with net income of $4.2 million, or 16 cents per diluted share, including merger integration costs, in the prior year's first quarter. Excluding the effect of after-tax merger integration costs of $5.2 million, or 20 cents per diluted share, net income for the prior year's first quarter was $9.4 million, or 36 cents per diluted share.
Total sales for the first quarter were $591.2 million compared with $572.0 million in the prior year's first quarter, an increase of $19.2 million or 3.4%. First quarter comparable store sales for the company increased 1.8% which was within the previous guidance of 1% to 2%.
The company opened five stores and closed four stores during the first quarter to arrive at a total number of stores in operation as of April 30, 2005 of 393 stores in 45 states.
Doug Morton, chief executive officer commented, “We were pleased with our top line performance during the quarter, primarily driven by strength in footwear, apparel and certain hard good categories. Our promising start to the spring season allowed us to exceed our previous gross margin assumptions and our expenses continue to be well controlled. In addition, our initiatives to reduce debt and inventory are progressing ahead of plan.”
Mr. Morton concluded, “We are encouraged by our start in fiscal 2005 and our confidence to effectively execute our strategic plan is reflected in our increased guidance for the fiscal year. Our momentum remains positive as we continue to benefit from the initiatives we put in place over the past several months.”
Guidance for Fiscal Year 2005
For the second quarter of fiscal 2005, the company is forecasting a comparable store sales increase of approximately 1% to 2%, total sales of $620 to $625 million and diluted EPS of 47 cents to 49 cents, based on 26.5 million diluted shares outstanding in the quarter. The company expects to open one new store and close two stores during the quarter.
For fiscal year 2005, the company is forecasting comparable store sales to increase approximately 2% and diluted EPS between $1.90 to $1.97, based on an estimated 26.5 million diluted shares outstanding. This earnings estimate includes a 3 cents to 5 cents reduction in diluted earnings per share from the impact of the previously announced change in lease accounting. The company expects to open approximately 14 new stores, relocate 4 stores and close 6 stores during the year.
The Sports Authority, Inc.
Condensed Consolidated Statements of Income
(Dollars in thousands, except share and per share data)
13 Weeks Ended
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April 30, May 1,
2005 2004
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Net sales $ 591,232 $ 572,041
Cost of goods sold, buying, and occupancy 430,374 412,735
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Gross profit 160,858 159,306
Gross profit % 27.2% 27.8%
Operating expenses:
Selling, general and administrative
expenses 142,449 139,246
Selling, general and administrative
expenses % 24.1% 24.3%
Integration costs - 8,558
Store pre-opening expenses 706 923
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Operating income 17,703 10,579
Non-operating income (expense):
Interest (5,496) (4,287)
Other income 934 520
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Income before income taxes 13,141 6,812
Income tax expense (5,191) (2,657)
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Net income $ 7,950 $ 4,155
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Earnings per share:
Basic $ 0.31 $ 0.16
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Diluted $ 0.30 $ 0.16
