LOS ANGELES, Aug. 8, 2012 (GLOBE NEWSWIRE) -- Sport Chalet, Inc. (SPCHA) (SPCHB), a leading operator of full-service, specialty sporting goods stores, today announced its financial results for the first quarter ended July 1, 2012.
First Quarter Summary
- Net income of $0.1 million compared to net loss of $0.8 million in the first quarter of the prior year;
- First quarter returns to profitability;
- Comparable store sales increased 2.9%;
- Team Sales division sales up 12.5%; and
- Online sales up 7.0%.
First Quarter Results
Sales increased $1.0 million, or 1.2%, to $83.8 million for the 13 weeks ended July 1, 2012 from $82.8 million for the 13 weeks ended July 3, 2011. The sales increase is primarily due to a 2.9% increase in comparable store sales, an improvement on top of the 2.3% increase in the same period last year. Team Sales division and online sales increased 12.5% and 7.0%, respectively. These sales increases were partially offset by a store closure which contributed $1.7 million in sales in the prior year.
Gross profit decreased $0.5 million, or 1.9%, and as a percent of sales decreased to 27.9% from 28.8%, primarily due to an increase in merchandise costs, changes in the product mix, and ongoing customer satisfaction initiatives implemented in August 2011.
Selling, general and administrative ("SG&A") expenses decreased $0.9 million, or 4.1%, primarily due to $0.8 million in savings from labor-related expenses. As a percent of sales, SG&A decreased to 24.7% from 26.1%.
Net income for the quarter ended July 1, 2012 increased $0.9 million to $0.1 million, or $0.01 per diluted share, compared to a net loss of $0.8 million, or $0.06 per diluted share, for the quarter ended July 3, 2011.
Craig Levra, Chairman and CEO, stated, "We are happy with our first quarter results as we rebounded from the unseasonably warm and dry winter weather that significantly affected our sales and profitability in the third and fourth quarter of fiscal 2012. This quarter marked the first profitable first quarter in the past five fiscal years as we improved to net income of $0.1 million from a net loss of $0.8 million last year. This result validates our belief that the consistent improvements we have made to our business over the past few years have positioned us to return to profitability for fiscal 2013."
"Despite the progress we made in the first quarter, there is still much room for improvement as we look ahead. Through the five weeks ended August 5, 2012, comparable store sales are up 3.8%, but the negative trends and effects in gross profit experienced during the first quarter have continued similarly in the second quarter. We are working to overcome this issue by focusing on our logistics initiatives including increased vendor collaboration with respect to merchandise shipping and handling for all vendors, which will lead to greater efficiencies in inventory and logistics. To that end, Danielle Dolloff has been promoted to the newly created position of Vice President -- Planning and Logistics to lead these efforts. We continue to review our strategies to maximize our potential for driving profitable sales in this economy."
New Store Opening
As previously announced, the Company currently plans to open a store in May 2013 in Downtown Los Angeles. Sport Chalet will be an anchor tenant at Brookfield Office Properties' (BPO: NYSE/TSX) FIGat7th, the destination retail center at the intersection of Figueroa Street and 7th Street undergoing a $40 million redevelopment. The store will occupy 26,800 square feet of space at the lower courtyard level, and will join City Target as the first new anchors at the redeveloped FIGat7th. This store will open with the next generation design of enhanced displays, fixtures, and graphics to reinforce its brand and technical merchandise and service offerings.
About Sport Chalet, Inc.
Sport Chalet, founded in 1959 by Norbert Olberz, is a leading, full service specialty sporting goods retailer with 54 stores in California, Arizona, Nevada and Utah; Sport Chalet online at www.sportchalet.com; and a Team Sales division. The Company offers over 50 specialty services for the sports enthusiast, including climbing, backcountry skiing, ski mountaineering, avalanche education, and mountain trekking instruction, car rack installation, snowboard and ski rental and repair, Scuba training and certification, Scuba boat charters, team sales, custom golf club fitting, racquet stringing, and bicycle tune-up and repair at its store locations.