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» Golfsmith International Holdings, Inc. Q2 2010 Earnings Call Transcript
With that, I’ll turn the call over to Marty.Martin E. Hanaka Great, thank you, Jean, and good morning, everyone. Business momentum continued through the key selling season of Q2, which is the biggest quarter of the year for Golfsmith. Our results reflect great execution and several key initiatives and I’d like to congratulate our entire team both in Austin and all of our stores for terrific job. With that ten straight months of solid comps, now three straight quarters, 6.4% in Q4 last year, 13.3% in Q1 and now 7.1% in the all important second quarter. We continue to focus on strengthening our product offering differentiating, marketing and assortments, building our Web business, expanding what is proven to be a very successful store model and enhancing our selling culture. In fact we continue to gain meaningful market share as the industry continues to consolidate and if you look at the core segment with Golf Datatech reports, we’ve had double digit share gains again, and that’s both in units and dollar shares. Then you probably know you’ve spent the last few years strengthening our business model, and are well positioned to capitalize on competitive closings and demographic changes that should benefit the Golf industry as a well. We’re really proud of our team and look forward to continue momentum as we remain committed to delivering great product, excellent service, and a dynamic activity rich shopping environment. Some of the numbers, net revenues increased over 10% to $130.2 million compared to $118 million in the second quarter of last year. Comparable store sales, as I said earlier were up 7% with our direct sales increasing 9% and that’s net of a 27% growth on our Web business let down by a continued decrease in clubmaking and a reduction in our circulation of the consumer catalog, so a net number of 9% in the direct channel.
Our AOV conversion came in over plan. Our traffic was a very slight increase, and then I think we’re demonstrating results on a improved product mix and the selling culture.We delivered 36% EPS growth of $0.49, per just $0.36 a year ago. Consolidation continues to be an opportunity for Golfsmith to expand our market share even in a climate where rounds played are down 7% year-to-date through May. We don’t expect the June numbers, which will do, be much improved over that. So in a very tough climate we’re having good results. It should be month, the date of July our sales top line, on July, and it’s on Saturday, is up at a rate consistent with Q2. Some of the highlights and merchandizing, as our custom fitting continues to be very strong and services of cornerstone around model. We are expanding apparel and footwear, we had started a couple of years with apparel at 15% of our total mix, are now up to about 90% and it targeted 25% long term and I have confidence that will be achieved. Proprietary brands stand at 11% of our business and a product quality certainly on par with the OEM brands driving higher brand awareness and value. Our new stores are performing above planned most recently one in the Washington DC area, we’re very pleased with that opening. And I’m pleased to announce today that we will have a fourth new store in fiscal ’11 located in (inaudible) Florida that we will open in the fourth quarter there by achieving our four store goal for the year. I mentioned selling culture and store ops are really driving performance and our new stores have achieved about 28% apparel mix, so the margin mix is much better than we have in our core business. We feel so good about our new store performance that we are announcing that we have signed two new leases for next year in the DC area again as we tend to sell out that market, also in Ohio and we have targeted Atlanta where we will reposition our entire network. Read the rest of this transcript for free on seekingalpha.com