Golf Galaxy 3Q Loss Widens

Third-quarter net sales for Eden Prairie, MN-based cataloger/retailer Golf Galaxy rose 45%, to $46.0 million for the three months ended Nov. 25. That figure is up from $31.8 million after the third quarter last year. Comparable-store sales increased nearly 4%. Its net loss for the quarter more than doubled, however, to $3.4 million from $1.6 million for the third quarter of 2005.

According to a release, the company typically reports a net loss in the third quarter, which is its slowest. This year’s third-quarter results included costs of $944,000 associated with the company’s pending acquisition by Dick’s Sporting Goods, which was announced on Nov. 13. Pittsburgh-based Dick’s agreed to buy Golf Galaxy for $225 million. The agreement calls for Dick’s to pay $18.82 for each share of Golf Galaxy, a premium of 19% above its closing price on Nov. 10.

Golf Galaxy operates 65 stores in 24 states as well as a Website and a catalog. The company generated $250 million in sales during the 12 months ended Aug. 26, with catalog and e-commerce sales accounting for only about 2%. Dick’s has reached $2.6 billion in annual sales at its full-line sporting goods stores.

Golf Galaxy had made a purchase of its own earlier this year. In March it acquired $24.5 million cataloger/retailer GolfWorks for approximately $4 million in cash and 150,000 shares of stocks valued at approximately $4.5 million.

Related articles:

Dick’s Sporting Goods to Buy Golf Galaxy

Golf Galaxy to Acquire GolfWorks

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