Online sales fuel Sport Chalet in third quarter
Sport Chalet’s digital strategy paid off in the third quarter ended Dec. 29, which saw online sales surge 22% from Thanksgiving to Christmas.
The company reported net income for the quarter of $1.5 million, or $0.10 per diluted share, compared to a net loss of $1.9 million, or $0.13 per diluted share, in the third quarter of last year.
Sales decreased 2.4% to $95.3 million from $97.6 million in the same period last year. The company said the sales decrease was fueled by the closure of three underperforming stores, which contributed $2.4 million in the same period of the prior year. The sales decrease was also due to an 11.9% sales decrease in the team sales division due to changes in personnel, and a decrease in comparable store sales. These declines were partially offset by the contribution of one new store opened at the end of the first fiscal quarter of 2014 and an increase in online sales, including mobile.
Comparable store sales decreased 1.3% for the quarter, compared to the same period last year, reflecting an overall soft holiday sales environment that began on a strong note but weakened during the final selling weeks of the year, partially due to a lack of winter weather across the company's markets.
Online sales for the third quarter increased 8.9%, compared to the same period last year, with 47.5% of sales originating outside the four states where Sport Chalet has stores. For the period from Thanksgiving through Christmas, online and mobile sales increased 22% and 296%, respectively, from last year.
"Sales for the quarter began on an upswing in October and November, followed by a strong start to the holiday selling season as evidenced by our Black Friday Weekend and Cyber Monday sales," said chairman and CEO Craig Levra. "Despite the strong start, winter weather did not materialize in our core Western markets and continues to present a challenge to our business. That said, I am proud of our team of experts for executing against a well-defined strategy to help mitigate poor winter conditions, and thus we were able to report our most profitable quarter in the past seven years.”
Levra added that he is pleased the performance of the next-generation store in downtown Los Angeles as well as its growing online and mobile business.
“This speaks to the growing popularity of the Sport Chalet brand, our online marketing initiatives and our ability to fuse in-store engagement with online and mobile tools for every customer we serve. Mobile also contributed to our online success as sales increased 180%, albeit off a small base, spurred by the launch of a new mobile platform the week before Thanksgiving," he added.