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Today's News...5/24/05

MAY 24, 2005 -- The Sports Authority Beats 1Q Forecasts

Sports Authority Inc. reported better-than-expected earnings for the first quarter, citing improved revenue and efficient cost controls.

Net income was $8 million, or 30 cents per share, up from $4.2 million, or 16 cents per share, a year ago. Excluding pretax merger integration costs of almost $9 million, year-ago net income was $9.4 million, or 36 cents per share.

The earnings exceeded the company's own forecast for net income of 24 cents to 26 cents per share. Analysts surveyed by Thomson Financial were expecting earnings of 25 cents per share.

Sales rose 3.4 percent to $591.2 million from $570.2 million. Same-store sales, or stores open at least one year, rose 1.8 percent.

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." Sports Authority said revenue growth was driven by strength in footwear, apparel and certain hard good categories. The company also said it did a good job controlling expenses during the quarter.

The company expects to earn 47 cents to 49 cents per share for the second quarter. Revenue is forecast at $620 million to $625 million, with same-store sales growth projected at 1 percent to 2 percent. Analysts are currently looking for the company to post a profit of 48 cents per share on revenue of $635.3 million.

For the full year, the company expects to earn $1.90 to $1.97 per share, which reflects a reduction of 3 cents to 5 cents per share related to a change in lease accounting. Same-stores sales are expected to increase by 2 percent. Analysts are expecting earnings of $1.90 per share and revenue of $2.54 billion.1Q


Comps Ahead 10.5% at Fleet Feet Stores

Fleet Feet, Inc. said its 64 stores recorded a 15.0 percent growth in overall retail sales for the first quarter of 2005 as compared to first quarter 2004.

Total retail sales for the quarter were a record high $11 million. Comparative stores sales for the quarter were up 10.5 percent over 2004.

“The continued growth and success of Fleet Feet stores nationwide is a tribute to the hard work, dedication and skills of our outstanding franchise owners,” said Fleet Feet President, Jeff Phillips. “This incredible group of franchisees is able to maintain strong relationships with customers, vendors and their communities while building and managing an intensely competitive business.”

Three new Fleet Feet stores opened in the first quarter 2005. Fleet Feet gained presence in Hickory, North Carolina; Madison, Wisconsin; and Stockton, California. Planned new store openings for the summer 2005 include Gaithersburg, Maryland; Kailua, Hawaii; and Elmhurst, Illinois.

“With such a strong start to the year, we are confident that 2005 will be one of the best in Fleet Feet history,” stated Phillips. “We are continuing to innovate and improve our customer service with the implementation of a sports bra fitting process. We've taken the methods used in the Fleet Feet Personal FIT Process that places consumers in the right products for their feet, and created a unique and powerful process to personalize the fitting of sports bras.”

Joey Pointer, Fleet Feet financial manager, said April has been particularly strong, benefitting from five weeks versus four weeks the prior year as well as underlying strength in the running category.

“April has been a pretty good month for us, and that's kind of an anomaly to the retail industry,” said Pointer.

Pointer said Fleet Feet franchises continue to roll out its Personal FIT Process. The stores have been focusing more on socks and bras, and recently signed a new sock brand, Balega, as part of its Personal FIT program. Champion and Moving Comfort are leading the sports bras effort.

“We just started the program last July with training, and we're really starting to see the fruits of that labor now,” said Pointer.

Fleet Feet 's corporate headquarters in Carrboro, N.C., as well as offices in Sacramento, Calif., and Boulder, Colo.


Nike Launches Major Campaign Behind Nike FREE

In what it's calling one of the company's largest spring marketing campaigns, Nike will present the revolutionary new Nike FREE shoe and educate athletes on the benefits of barefoot training.

The new Nike advertising spot, "Run Barefoot", features elite runners, Dathan Ritzenhein, Alan Webb and Adam Goucher recreating the beach-running scene from the 1981 movie "Chariots of Fire", as a group of men run barefoot on the beach wearing uniform white shorts and shirts. Shot along California's Pismo Beach, the runners begin passing items from a cityscape along the beach -- a parking meter, a mailbox, a taxi, a fire escape, a stoplight -- before the lead runner appears at a city street corner wearing Nike FREE. It closes with the tagline, "Run Barefoot" and directs athletes to nikefree.com. Both a 30-second and a 60-second spot have been created. The spot will launch on FOX's "American Idol", Tuesday, May 24.

Nike said the new lightweight and flexible design of Nike FREE combines nature with technology to simulate the act of running barefoot on grass helping to strengthen muscles, prevent injury and improve overall athletic performance for a multitude of sports.

The new line includes four new shoes for running and cross training: The Nike Free Women's Runner 5.0, Nike Free Men's Runner 5.0, Nike Free Freedom Mid 5.0 and Nike Free Trainer 5.0. The Nike FREE line will continue to develop into other areas of sport during the next six months, including Trail, Walking and Kids. In addition, just in time for the Tour de France, Nike is introducing a Lance-inspired Nike FREE shoe with signature yellow band, are part of the 10//2 Collection, which gives $1 to the Lance Armstrong Foundation for every article sold.

The Nike FREE 5.0 was awarded the 2005 Outside Magazine Gear of the Year award for the Road Running Shoe category.


The Hockey Co. Appoints VP, Global Product Creation

The Hockey Company announced the appointment of Michel Benoît to the position of Vice-President, Global Product Creation.

"We are pleased to add Michel to our team." said Matt O'Toole, President and CEO of The Hockey Company, "He is a proven innovation leader with outstanding accomplishments in the development and launch of market leading sports products."

Mr. Benoît has extensive background in the sporting goods industry where he has held executive management positions in marketing and product development with ADIDAS-SALOMON, Bauer-Nike Hockey and Bombardier Recreational Products. He was most recently with the Johnson Envinrude division of Bombardier Recreational Products.


ispo china 06 Doubles To More Than 300 Exhibitors

After the successful premier of ispo china 05, the 1st International Trade Show for Brands in Sports, Fashion and Lifestyle in Asia, the organizers are expecting double the hall area to more than 20,000 square meters for the second trade fair. It takes place on the grounds of the Shanghai New International Expo Center from March 13 to 16, 2006. Accordingly, the number of exhibiting companies will increase from 148 to more than 300; almost 400 brands will be represented in Shanghai.

The “brands only” concept, which only showcases brands operating internationally and which was very well received by the exhibitors and visitors at ispo china, will be expanded further. As a result, ispo china 06 will again become the meeting place of international sports brands and specialized retailers in the Asian-Pacific region and make direct exchanges of high quality brand products and innovations possible.

The categories of ispo china 06 are Snow Sports, Outdoor, Team Sports, Fitness & Wellness, Board Sports and Golf. In line with market developments, Racket as well as Fabrics & Fibers will be exhibited as a separate category, and sportswear will be expanded with sports style. The organizers are arranging specific events within the categories, such as the second ispo china climbing contest, second Shanghai Skate Masters, Fashion Shows, Summits and Round Tables as well as the first All Asian Ski Business & Resort Conference. The Retail Conference by W.L. Gore will again bring together retailers from all of China and discuss important topics specific to the industry with them.

The organizers are also going to focus increasingly on the complete Asian-Pacific region. Approximately two-thirds of the total of 13,500 trade visitors in March 2005 came from China and consequently represent the essential potential from all provinces of the country. One-third of the trade visitors came from the neighboring countries of China. The high share of foreign visitors from the Asian-Pacific region, especially from Korea and Japan, confirmed that the concept of ispo china was received successfully in Asia. The activities for canvassing for trade visitors will be increased even more there, database and network will be expanded further, new and direct contacts to retailers and trade associations will be established and elaborated with partner key account programs.

For example, the Road Show will be continued and expanded. Up to 15 stops in China, Hong Kong, Taiwan, Japan, Korea, Singapore and Indonesia are planned to make ispo china even more well known in the complete Asian-Pacific region and establish it as the most important information platform. The Brand Book for ispo china 05 will also be presented within the framework of the Road Show. This brand directory makes it possible for exhibitors to present themselves individually to these markets and provides visitors with information dealing with all aspects of ispo china 06. Exhibiting brands will also be integrated more strongly into the Road Show. They will supplement the program with company presentations, product tests or sports events. As a result, the Road Show will have two-fold benefits for the participating retailers and generate important contacts in advance of the trade fair.

ispo china is supporting an event organized by C-Zone, “Maximizing the Power of Sports Marketing in China” in the preparatory phase of the event. In the same way as the sports sponsoring congress of the European Sponsoring Market, which takes place every year parallel to ispo winter in Munich in February, this congress is also going to bring internationally recognized experts together to discuss topics such as branding strategies, promotion, sports marketing and sponsoring. The event will take place in Shanghai on June 8 and 9. Additional information is available at www.c-zonechina.

ispo china 06 is being designed as a trade fair reserved for professionals in the industry. Contrary to the premier, the organizers are not going to hold a public day the second time around, so that the work atmosphere of the trade fair can be maintained on all four trade fair days. Already at the last public day on the last trade fair day, the visitors were mostly professionals from the industry.

Messe Muenchen GmbH has expanded its event portfolio with ispo china. Following Munich, event site of ispo winter and ispo summer, Shanghai is the second trade fair site; ispo Russia 05 in Moscow will follow in September. The international network of the Messe München GmbH with subsidiaries and foreign representatives in more than 80 countries provides optimum customer support not just in Europe and the USA. In close collaboration with the respective national governments and associations on site, such as the Italian manufacturer’s association Assosportand the Spanish industrial association Afydad, the European Outdoor Group and the Scandinavian Outdoor Group, it organizes joint participation for many brands under one roof. This includes the German joint participation, within which 15 German companies exhibit and which is sponsored by the German Economics Ministry.


SAS Provides Sport Chalet with Inventory Management Solutions

Sport Chalet will use software solutions from SAS and Marketmax, a division of SAS, to analyze and manage sophisticated financial, assortment and allocation strategies.

"As we expand into new markets we have a tremendous opportunity with SAS to take our customers' shopping experience to the next level," said Jason Gautereaux, director of inventory management at Sport Chalet. "With financial planning, assortment planning, forecasting and allocation from SAS our assortments can be back checked against financial goals and used to develop inventory plans. With the optimal mix of products our customers will be happier and our stores will be more profitable."

Sport Chalet will use assortment planning from SAS to determine which items its stores should carry, in which colors and quantities, and at what price. The financial planning solution will enable Sport Chalet to set business goals based on past, present, and projected future demand.

Sport Chalet will be able to ensure its product mix is synchronized with its financial objectives through a centralized and integrated single database. The information will be integrated with intelligent clustering, forecasting and performance analysis to build the ideal breadth and depth of product based on customers' real interests, location, demographics and buying trends.

The allocation module will enable Sport Chalet to ship merchandise to stores most in need of product. Sport Chalet will be able to determine the best possible allocation quantity by location through the utilization of available data and the selection of key performance metrics to analyze store-specific needs.

"SAS' integrated solution will allow Sport Chalet to back check assortments against financial goals and develop inventory plans. With properly tuned plans Sport Chalet will be able to facilitate the proper flow of goods. Inventory will be efficiently managed, and will free up time and resources moving and storing unsold goods," added Marketmax's Schafer. "This will result in increased revenues, improved margins, and improved inventory visibility. All of which will lead to more satisfied Sport Chalet customers."

"There were a number of reasons that SAS stood out from the pack," explained Gautereaux of Sport Chalet. "The flexibility of the system and the ability to automate the process and provide recommended assortments was impressive. The people were stellar. The SAS team was one step above the rest in its knowledge of the product and the industry, and in their willingness to partner with Sport Chalet in the long term. Of course SAS' longevity, stability and track record of investing in research and development to provide a product suite for today and the future was a deciding factor too."

BRIEFS

W.R. Case and Sons Cutlery Company launched a newly designed website, www.wrcase.com , that highlights not just its knives, but the stories and traditions that accompany each one. The home page highlights a Share Your Story section which awards pocket knives for the most interesting experiences with Case products. The stories exist, in part, due to the 116-year history of the company. The Tales & Traditions section of the site recounts the long-standing tradition of Case knives, including Case family anecdotes, historical photographs and a timeline that starts from the early 1800s. It also shares the many stories and letters received from consumers about their Case knives.

Manchaster United fans opposed to Malcolm Glazer's takeover will be invited to donate their Nike gear to third-world charities at a rally next week. The Not For Sale coalition is behind the "Nike amnesty," which they say allows FANs to show their opposition to Nike, which is United's largest partners.


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

Categories
Inventory management
Fairs
Earnings
Mergers & acquisitions
Markets

Companies
The Sports Authority Inc.
Fleet Feet Inc.
The Sports Authority Inc.
Sport Chalet Inc.
Authority Beats 1Q Forecasts

Concepts
ispo china
net income
sporting goods
assortment planning
inventory plans

People
Doug Morton
Nike FREE
Michel Benoît
Jeff Phillips
Alan Webb


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