Retailers in the Bicycle, Outdoor, and SnowSports sectors are showing strong top-line improvements, but this is not trickling down to the bottom line in all circumstances. SnowSports Retailers in the Northeast had a particularly difficult Q1. The warm weather started in December and the snow never returned. This slowed sales during the vast majority of the crucial spring holiday skiing weekends. However, nation-wide, overall sales are brisk. According to POS data collected by SportScanINFO, every category sold through outdoor and SnowSports Retailers is performing ahead of last year.
Outdoor equipment saw higher average selling prices and a high single digit increase in units-sold boost revenues in the low teens at full-line sporting goods retailers. Internet sales of outdoor equipment out-paced brick and mortal sporting goods retailers with sales increases in the upper-teens. However the on-line channel showed evidence of slightly lower ASPs.
Ski and snowboard equipment sales were healthy in the first quarter with a 23% increase in revenues at sports retailers and increases in the upper 30% range through Internet/catalog distribution channels. However, units-sold increased in the 40% range pointing towards lower ASPs and lower margins.
Outerwear sales showed an even stronger performance across all channels. Sporting goods retailers reported sales increases in the mid-twenty percent range while Internet/Catalog retailers and sports specialty retailers more than doubled this growth rate. Full Line sporting Goods retailers showed evidence of lower ASPs, while Internet/Catalog and Specialty retailers were able to improve this metric.
The individual publicly traded retailers covered in the chart on page six clearly reflect these sales numbers with double digit increases nearly across the board. The only retailer to show sales declines during the first quarter is Timberlands owned-retail chain. Other than GSI Commerce, who deals exclusively in on-line retail, the leader is clearly Zumiez, who used geographic expansion and double digit comps to fuel its sales increase.
Cabelas and Sportsmans Guide both translated sales gains into earnings improvement, while Gander continues to expand its square footage faster than its sales growth.
Operationally, retailers are showing more of a mixed bag. Zumiez and Dicks Sporting Goods both showed healthy margin gains during the quarter, which pulled both retailers into the black. Gander Mountain was the only retailer to show significant margin erosion, dropping over a full percentage point due to higher store occupancy costs as a percentage of sales.
GSI Commerce and Gander Mountain both saw considerable increases in their net loss for the quarter, while Sport Chalet more than doubled its net income during the companys fiscal fourth quarter (see the full results in this issue of BOSS).
Overall inventory levels were up for the quarter, but they trailed sales increases by five full percentage points. Northeastern SnowSports shops are still holding on to some winter inventory, but for the most part, retailers are going into the summer season with relatively clean stock rooms. Most anecdotal evidence points to a healthy sell-in season for SnowSports vendors, especially from retailers in the Pacific Northwest and Rockies regions. At the same time, the spring season seems to moving in a positive direction, in spite of higher gas prices.