FGL Sports sales grew 1.7 percent to C$379.4 million and same-store sales 6.4 percent in the first quarter ended March 29, as cold weather and excitement over Canada’s Olympic hockey team drove growth in sales of winter apparel and hockey jerseys.
Same store sales at FGL Sports' flagship Sport Chek banner increased 11.9 percent in the quarter, according to FGL Sport’s parent company, Canadian Tire Corp. Sales gains were led by all winter apparel categories and hard goods as well as the incremental sales of Olympic performance apparel and Team Canada hockey apparel leading up and following the Sochi Olympic Winter Games.
“We were really pleased with sales of Adidas Olympic wear, and Nike Olympic hockey jerseys, but even without those sales, Chek would have been up double digits,” said Michael Medline, president of CTC.
The opening of an 80,000-square-foot Sport Check/Atmosphere store at a mall in Edmonton, Alberta also boosted sales.
FGL Sports generated sales per square foot of $324, up 4.4 percent from $311 in the third quarter of 2013a year earlier. The company ended the quarter with 417 stories, down from 421 a year earlier, including 170 Sport Chek, 71 Sports Experts, 65 Atmosphere (outdoor specialty) and 111 Pro Hockey Life and other stores.
CTC reported sales were very strong across all its retail banners in January and February as excitement over Team Canada stimulated sales of Olympic merchandise at Canadian Tire Retail, Sport Chek and Sports Experts. However, sales began comping negatively in March as cold weather persisted and sales of spring merchandise lagged.
Medline said that CTC’s Mark’s banner, which sells casual and work apparel through 382 stores, will begin expanding its selection of Merrell and add “much more Columbia and Helly Hansen work wear” alongside its private label offerings. He also noted that CTC had promoted Chad McKinnon to the job of COO at FGL Sports.
Canadian Tire Corp. reported Retail segment revenue increased 3.4 percent, or $76.2 million to $2.3 billion in the quarter due to strong shipments at Canadian Tire and sales growth at FGL Sports, Petroleum and Mark's. Income before income taxes in the Retail segment was $16.6 million, down 28.2 percent over the prior year, reflecting CTC’s decision to place its real estate in an REIT that then collects market rents from its stores. The earnings also reflect strong gross margin performance across all retail businesses, which were offset by planned increases in marketing and advertising expenses due to Olympic and sport sponsorship activities and higher stock-based compensation expenses.
The flagship Canadian Tire chain, which also sells sporting goods, reported flat sales compared with the first quarter 2013 on a 0.5 percent decline in same-store sales. CTC said strong sales in January and February were offset in March, when continuing winter weather hurt sales of spring product.