FINANCE

Sportsman’s Warehouse swings to Q1 loss

BY Dan Berthiaume

Midvale, Utah — Increased selling, general and administrative expenses were a key factor in Sportsman’s Warehouse Holdings Inc. swinging to a net loss of $3.37 million in the first quarter of fiscal 2014, compared to net profit of $4.46 million in the same period a year earlier. The retailer plans to open eight new stores during the fiscal year, including four in the second quarter.

Net sales dropped 3% to $132.4 million from $136.5 million. Same store sales decreased by 18.1%, primarily as a result of the decline in demand for firearms and ammunition.

For the second quarter of fiscal 2014, net income is expected to be in the range of $3.9 million to $4.2 million, while net sales are expected to be in the range of $154 million to $157 million based on opening four new stores and a decrease in same-store sales from the second quarter of fiscal year 2013 in the range of 7-8%.

For fiscal 2014, net income is expected to be in the range of $18.2 million to $20.3 million, while net sales are expected to be in the range of $665 million to $675 million, based on opening eight new stores for the full year and a decrease in same store sales from fiscal year 2013 in the range of 6% to 8%.

"Our first quarter results, which came in better than our expectations, were impacted by the general slowdown in firearm sales against the surge-driven comparison from last year, a dynamic we expect to continue until the second half of this year,” said John Schaefer, president and CEO of Sportsman’s Warehouse.

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REAL ESTATE

City Furniture expands in Florida

BY Dan Berthiaume

Taramac, Fla. — Furniture retailer City Furniture is completing a $17.5 realignment of its South Florida retail network with the opening of a new 34,000-sq.-ft. Ashley Furniture HomeStore in Cutler Bay, Florida. This location is adjacent to a 56,000-sq.-ft. City Furniture showroom that opened in October 2013, creating a 90,000-sq.-ft. superstore.

City Furniture, which is the Southeast and Southwest Florida licensee for Ashley Furniture HomeStore, added or renovated five South Florida stores since 2012 and plans to open three more Ashley Furniture HomeStore locations and another City Furniture showroom in South Florida in the next three years. The company is also researching possible sites for future expansion in the Tampa and Orlando markets, as well as in Miami-Dade County.

“This opening is a significant milestone in our strategic plan,” said City Furniture president Keith Koenig. “We’ve, reconfiguring our company to do a better job meeting customers’ needs. At the same time, we’ve geared our expanded product lines and great values to consumers’ evolving tastes.”

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OPERATIONS

Lululemon founder Wilson votes against reinstating directors

BY Dan Berthiaume

Vancouver, Canada — Lululemon Athletica Inc. founder Chip Wilson announced that he voted against the re-election of Michael Casey and RoAnn Costin to the board of Lululemon Athletica. Wilson, who founded the company in 1998, had been living in Australia and was asked by the company to return and deal with a quality control issue that resulted in a product recall during 2013.

Wilson oversaw a management shakeup that resulted in a new CEO and head of product quality. Casey, a former Starbucks executive, recently rose to chairman of the board from lead director after Wilson announced his resignation as chairman to focus on other ventures. Costin is president of a private Boston-based equity company that focuses on investing in early and expansion-stage consumer product and retailing companies.

"After being asked by the board to come back from Australia to help the company recover from the product recall last year, I have decided to vote against the re-election of the company’s outside board members,” said Wilson. “While I am excited about the new management team that I helped put in place, I am concerned that the board is not aligned with the core values of product and innovation on which Lululemon was founded and on which the company thrived. As a 27% shareholder in the company, I believe change is now needed at the board level to increase shareholder value."

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