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Golfsmith International Holdings CEO Discusses Q4 2010 Results - Earnings Call Transcript

With that, I’ll turn the call over to Marty.

Martin Hanaka

Thank you, and good morning all. Thank you for your time and interest in Golfsmith today. Joining me this morning is, Sue Gove as mentioned and remotely Jim Eliasberg, our General Counsel, Jeff Laforce [Ph] and Anna Jobe our VP, Controller.

I will begin with a synopsis of Q4 and then a summary of trends both positive and negative. Sue will then provide an in-depth review of our financials and I will close with some forward-looking direction.

Q4 began strongly in October. It was our best month of the quarter, it continued with a solid November and solid December. Our ad spend overall was essentially flat year-over-year and we comp every single week of the quarter.

Traffic was off slightly over 1%, but our average order value and conversion rose in low single-digits producing a nice net result. Kudos to our entire team as our selling culture continues to improve every quarter. A special mention has to go to our Web team. A cross-section of people from every function at Golfsmith that got behind our growth strategy and produced a 40% increase, that’s right 40. 40% demand increase in the quarter. It is our best performance overall in the top-line since Q1 ‘06, that’s roughly five years. The Direct business overall, including catalogs, was up over 30%.

Our dollar market share grew in all categories, those being the eight that are tracked by Golf Datatech, and was our best showing in years. The industry was actually down 0.4% and we were up in the teens for the quarter and we had a net pick up of 8.2% in dollar share gain in 2010.

This is encouraging as the Sports and Leisure Research Group has validated at 2010 positive channel shift back towards our channel, off-course specialty excess of January 2011. These share gains are a byproduct of our execution, our selling culture improvements and positioning in the industry consolidation that resulted in a 11% fewer doors in our space in 2010 and that is a total aggregate number of 32% fewer golf specialty doors since 2006, according to the Longitudes Group, another independent study that was released in January 2011.

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