Previous Statements by GOLF
» Golfsmith International Holdings' CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Golfsmith International Holdings CEO Discusses Q2 2011 Results - Earnings Call Transcript
» Golfsmith International Holdings CEO Discusses Q1 2011 Results - Earnings Call Transcript
Martin HanakaThank you, Jean, and good afternoon everyone. We appreciate your time and interest in the Golfsmith fourth quarter earnings results today. I am in Myrtle Beach, I am suffering a little here, there is pollen flying everywhere not on vacation and Sue Gove and our team are in Texas. I’d just like to pause before we get into this and please join me in congratulating Sue on her recent promotion to President, she has done amazing job for us over the last three plus years and Sue has earned her recognition. I’m going to start with the headlines, and then Sue will do the numbers and then I’ll end with some 2012 guidance. As I look back at the quarter there is four things we point out and I’ll go into each one of these in more depth in a minute. But we had a soft top line and frankly it’s our first set back in several quarters and I think there are some good reasons for it that I’ll explain. Second, the ERP conversion that we conducted was not perfect and we roughed with it and that cost us about a $0.5 million in profit. The third thing is the movement in gross margins. We are buying better and the strategy of moving to mix both in apparel and proprietary is working really beautifully, so that’s really developed into some gains in the quarter and year-to-date and we see that continuing. And then finally, the big one maybe you probably you want to know about is the $1.3 million and cost outside the ordinary course of business, and frankly I hope you can appreciate that this disclosure is meant to explain higher cost, but we are really cannot get into the details behind it, so we will not be answering any questions on this topic at this time. You could trust that we will be proactive and transparent and if there is something to share you’ll hear it from us first.
Now, let me give you more flavor on the results before turning it over to Sue to go in-depth on the numbers, and once again I will conclude with 2012 direction.The top line really is an issue in October. We had a double digit decrease in October, a combination of reasons. Came back in November where we were down less than 1% basically flat in December. But we were disappointed obviously in October, it was a byproduct of several things. The ERP is certainly a factor, particularly in web generated orders that we send off the back door of our retail stores that cost us good deal of comps. Our traffic was down 6% and that’s the byproduct of killing a direct marketing event that we wish we hadn’t [indiscernible], but our AOV was up, our conversion was basically flat. So at the end of the day between ERP and not horrendous direct marketing event for retail had cost us and it hurt us badly. We did still perform better than the industry in the quarter, but our market share gain was only in the single digits as opposed to the double digit share gain we’ve seen all year. In fact we had 11.5% share gain if you measure it in dollars across the eight categories of Golf Datatech measures and we had a 12.6% share gain in units for the full year. Our web demand was solid, it was up 16% for the quarter and 19% for the year, but again in October only a 3% gain. So that was the month it was. It really affected our quarterly results because there is still some business to be done in October. In hindsight there were a couple of other things that we did. We would have changed had our brothers in the fourth quarter besides October when we thought we had momentum and we could take the money and take it to the bottom line. We are looking at that as an opportunity for next year. But we did move our friends and family up earlier before our Thanksgiving, a trend we saw elsewhere in retail and we think that was a mistake and then finally we kept the same timing December year-over-year and wish we had pushed it back a month because we lost some growth there in the quarters. So mistakes that we will not be repeating going forward. Read the rest of this transcript for free on seekingalpha.com