Tuesday November 11, 4:30 pm Eastern Time
Company Press Release
The Sports Authority Reports Record 1997 Third-Quarter
Sales of $341 Million and Net Income of $2.0 Million
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Nov. 11, 1997--The Sports Authority, Inc. (NYSE:TSA -
news), the world's largest full-line sporting goods retailer, today announced third quarter net income,
earnings per share, and sales for the period ending on October 26, 1997.
The Company earned net income of $2.0 million or $0.06 per share, compared to net income of $2.0 million
or $0.06 per share in the third quarter of the prior year.
Sales for the period were $341 million, a 16% increase over the $293 million for the same period in the
prior year. Comparable store sales decreased 1.9%, while sales adjusted for stores cannibalized by new store
openings were flat.
Jack Smith, Chairman and CEO, commented, ''As anticipated, comparisons for the quarter were again
adversely impacted by the prior year's sales of Olympic merchandise, abdominal exercisers, and in-line
skates, especially during the first part of the quarter. However, we are pleased with our growth in other
categories. Despite the general industry concerns, our comparable store sales in athletic footwear continue to
be positive, and our golf and team sports categories remain strong. Additionally, we continue to see positive
trends in our youth footwear and apparel.
''These strengths combined with ongoing shifts in our merchandise mix continue to positively drive our
gross margin which increased 0.7%, to 29.1% for the quarter. SG&A as a percent of sales increased from
26.1% in the same period of the prior year to 26.7% for this quarter. This is largely attributable to the
ongoing expenses related to opening our first regional distribution center and reduced sales productivity. Our
inventory management was strong throughout the period, with end of quarter per store inventory levels
decreasing 1.3% over the prior year.''
Net income for the nine months year to date was $14.2 million or $0.45 per share, compared with $13.2
million or $0.41 per share in the same period of the prior year. Year to date, sales totaled $1.0 billion, a
17% increase over the $895 million in the prior year. Comparable store sales for the nine months decreased
1.5%, and adjusted for stores cannibalized by new store openings comparable store sales were flat.
Further commenting on the business, Jack Smith stated, ''We are excited to have received our first shipment
of merchandise in our new regional distribution center outside of Atlanta, Georgia, and we will continue to
operate the facility in a limited, testing capacity through the fourth quarter. This new logistics strategy is
anticipated to include openings of additional facilities over the next two years to cover the Northeast, West
& Midwest regions of the country. As a result of this strategy we expect a number of operational efficiencies
and productivity enhancements, including improved vendor efficiencies, reduced transportation costs,
improved inventory management, improved merchandise allocations, and substantial labor efficiencies due to
a centralized training processing and automation.
''Additionally, November 1997 marks the 10th anniversary for the Company, and we are celebrating this
milestone with a number of exciting in-store promotions and events. Our growth over the last 10 years and
current position of leadership in the industry is a result of team effort and commitment led by strong
management and ultimately excellent execution. We are excited to continue this leadership, commitment,
and execution into our next 10 years.''
The Sports Authority opened 11 new locations during the third quarter, resulting in 185 full-line sporting
goods superstores at the end of the quarter; 173 stores in 28 states across the United States, six in Canada,
and six in Japan under its joint venture agreement with JUSCO Co., Ltd. In the fourth quarter the Company
plans to open 13 new domestic stores, including new market entries into Dallas, and the states Arkansas
and Alabama, as well as one additional location in Japan.
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