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Today's news...4/6/05

APRIL 06, 2005 -- Callaway Q1 Well Short Of Expectations

Callaway Golf Co. said that first-quarter results will fall below Wall Street expectations, due to purposely staggered product launches and a reduction in inventory levels.

Callaway estimates net sales for the first quarter ended March 31, 2005 of approximately $300 million with corresponding earnings per diluted share ranging from 26 to 28 cents. Excluding integration charges of approximately 3 cents per diluted share associated with the consolidation of the Top-Flite and Callaway Golf operations, pro forma earnings per diluted share are estimated to range from 29 to 31 cents.

In the year-ago quarter, Callaway earned 64 cents a share on sales of $363.7 million. Analysts surveyed by Thomson Financial are looking for higher operating profit of 49 cents per share on revenue of $339.3 million. The company is expected to release first-quarter results during the week of April 18.

William C. Baker, Chairman and Chief Executive Officer of Callaway Golf, commented, "As we emphasized earlier this year, net sales generated in the first quarter of fiscal 2005 were expected to be less than 2004 for two primary reasons. First, Callaway Golf is purposely staggering its new product launches more evenly this year. Second, the Company has carefully managed the amount of inventory shipped into the marketplace during the first quarter. These actions were taken to assure that every product launch was fully supported and to avoid the build-up of inventory at retail that was experienced last year. Both initiatives should promote sell-through of new and existing product."

Mr. Baker added, "We are pleased with the initial reception of our new products at retail and the early sell-through to consumers thus far. Retail inventories are in-line with our expectations and we are seeing gains in market share across our product portfolio. These gains could be enhanced by additional products scheduled to start shipping over the next two quarters, including our new X-Tour irons currently being used so successfully by Phil Mickelson. We are appropriately positioned in the marketplace with new products and inventory and believe that our commitment to innovative products and timely introductions will build sustainable, long-term value for our shareholders."

Gildan Lifts Guidance

Gildan Activewear Inc. said it now expects diluted EPS to be at least 10% above the top end of its previously communicated guidance range of U.S. 60 cents to U.S. 65 cents for the quarter, excluding a special charge for the closure of its Canadian yarn-spinning facilitie, which is estimated at approximately U.S. 26 cents per share.

The higher than anticipated growth in E.P.S. is primarily attributable to more favourable selling price realizations for Gildan's products in the quarter. In addition, Gildan has achieved its planned targets for unit volume growth.

The Company indicated that it now expects full year diluted EPS to be approximately U.S. $2.80, before the special charge, and approximately U.S. $2.54 after the special charge, up from the Company's prior full year guidance of approximately U.S. $ 2.60 and U.S. $2.34 respectively. The Company continues to assume sequentially lower unit selling prices in the second half of the fiscal year, together with continuing capacity constraints which are not expected to be alleviated until the first quarter of fiscal 2006.

Fila Opens Pop-Up Store In Manhattan

Italian apparel company Fila is opening a pop-up store in the trendy Manhattan neighborhood known as NoLita and will invite paintbrush-wielding, espresso-sipping shoppers to come by and enjoy the ambience, according to Adweek.

The promotional space has been designed to showcase the manufacturer's Filativa active line that fuses sports-inspired footwear and apparel with Italian design. Visitors to the store, which will be open for a month, will be invited to paint designs on canvas, which will then be heat-pressed to a blank Filativa T-shirt.

Major League Baseball Teams Up With Toys "R" Us

Major League Baseball said MLB merchandise is being showcased in Opening Day shops located in 680 Toys "R" Us stores. The Opening Day shops will feature a broad assortment of officially licensed MLB merchandise, including apparel, video games, baseball cards, sporting goods, and collectibles.

In addition, the shops will offer items exclusive to Toys "R" Us, including a three-inch figure of former Yankee Don Mattingly by McFarlane Toys; a boxed set with six-inch figures of Barry Bonds and Willie Mays from McFarlane Toys; and a 2005 Opening Day Relic Edition Card Set, featuring an exclusive chrome parallel card, from Topps. Items vary by store, and by market. Fans who are unable to visit their local Toys "R" Us store during the promotion can buy team-specific products by visiting Sports "R" Us' official Web site.

"We are very excited to extend our relationship with Toys 'R' Us by forming this Opening Day retail partnership," said Howard Smith, senior vice president of licensing for Major League Baseball Properties. "Opening Day of the Major League Baseball regular season is a true national sports holiday, and to celebrate Opening Day with feature shops and merchandise presentations in nearly 700 Toys 'R' Us stores nationwide is a fantastic way to extend the excitement of the 2005 Major League Baseball season."

Fans will have the opportunity to meet their favorite players during personal appearances at Toys "R" Us stores in Atlanta, Boston, Chicago, Cleveland, Houston, Los Angeles, New York, Philadelphia, San Francisco, Seattle and St. Louis.

"This partnership with Major League Baseball allows us to expand our team specific offerings to our customers across the country," said Jim Feldt, president of merchandising for Toys "R" Us, "and provides kids with the opportunity to personally meet their favorite players."

Customers who purchase $20 or more from the MLB Feature Shop at Toys "R" Us will receive a commemorative MLB Opening Day pin while supplies last.

MLB events at Toys "R" Us Times Square in New York will include a personal appearance by Todd McFarlane, who will sign "McFarlane's Sports Picks" figures on April 14. MLB products will be featured in the Times Square store's Windows on Broadway.

In addition, MLB Radio will broadcast live from the Times Square store on Thursday. "The Todd McFarlane Show," hosted by the toy creator, will air live at 2 p.m. ET, and "Stayin' Hot" will follow at 3 p.m.

Toys "R" Us chain stores will feature the MLB Feature Shops through May 14. A complete list of MLB events scheduled to take place at Toys R Us stores nationwide can be found by visiting the Toys R Us corporate Web site.


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Quick links: One-click access to topics in this article.

Sporting goods industry
Earnings estimates

Callaway Golf Company
Toys 'R' Us Inc.
Gildan Activewear Inc.
Toys "R" Us

diluted share
special charge
sporting goods
first-quarter results
net sales

William C. Baker
Phil Mickelson
Todd McFarlane
League Baseball Teams Up
Yankee Don Mattingly

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