Financial Reports: The Sportsman’s Guide, Geerlings & Wade

Looks like The Sportsman’s Guide (Nasdaq: SGDE) is taking aim at profitability. For the year ended Dec. 31, sales increased 6%, to $180.3 million, compared with $169.7 million in sales last year. Annual net earnings increased 43%, to $4.0 million for the year, compared with net earnings of $2.8 million last year due to more profitable mailings and stronger Web sales—which accounted for about 30% of total sales in 2002, compared with 21% last year.

Sales for the quarter ended Dec. 31, totaled $66.8 million, a 7% increase from $62.5 million last year. The South St. Paul, MN-based cataloger of outdoor gear attributes the quarterly increase to higher Internet and catalog sales and enhanced catalog productivity. Quarterly net earnings fell slightly to $2.6 million, compared with $3.3 million last year. The lower level of net income in the fourth quarter stems from the reversal of a previously established deferred tax asset reserve. Apart from the tax charge, however, earnings from operations for the quarter were slightly higher in 2002 than reported in 2001.

Wine and related accessories direct marketer Geerlings & Wade reported fourth-quarter net income of $1.4 million for the quarter ended Dec. 31, compared with a $910,000 net loss last year. But the company’s sales slipped 23%, from $10.8 million to $8.3 million, during the same period.

The Canton, MA-based Geerlings & Wade attributed its drop in fourth-quarter sales to eliminating unprofitable promotions, a generally weaker holiday sales season, and a reduced customer base. The marketer cut back its customer acquisition programs during 2000 and 2001, but has recently tested new strategies to acquire customers and will roll out a new acquisition campaign during the first quarter of 2003.

During the year ended Dec. 31, sales at Geerlings & Wade fell 15%, to $27.9 million, compared with $32.7 million last year. The company’s net loss for the year widened from $1.5 million to $1.7 million.

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