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Easton-Bell reports 5 percent jump in Q1 sales

Santa Cruz Sentinel

More people are getting outside and playing or at least spending money on Easton-Bell sporting goods, which reported Wednesday that sales had picked up for the first time in a year.

The Van Nuys-based company, which sells sporting goods under the brand names Giro, Bell, Easton, Riddell and Blackburn, maintains a research and development facility in Scotts Valley.

First quarter sales climbed 5 percent to $194.1 million in the first quarter ending April 3, compared to $184.9 million in the same quarter a year ago. Net sales, however, were down to $122,000 compared to $975,000 a year ago, in part due to higher investments in research and development.

The company has updated its Mexico production facility to handle new products and beefed up some areas of the business such as high end bicycle products.

“As you can see from our financial performance for the quarter, we are seeing improvements in our business,” said Paul Harrington, chief executive officer and president. On a telephone call that was broadcast via the Internet, he told analysts and investors that consumer spending is showing signs of recovery.

“There has been an increase in retail traffic although sporadic from month to month and inconsistent across geographies,” he said.

Sales in the Team Sports category increased nearly 11 percent in the first quarter from a year ago, but, that was offset by a 3.1 percent drop in action sports-related sales.

The cycling business has been slower to pick up than expected, Harrington said.

“We are seeing the daily ordering of cycling business improve,” but, he said, because wholesalers and manufacturers cut their inventories, there just wasn’t as much purchasing of our components. “I believe that they’re adjusting their inventory and, in some cases, pushing back the purchases because they’re doing a lot of just-in-time with their retailers. We see some positive trends but not significant.”

The company, he said, was concentrating on the aftermarket business and working with independent retailers to drive sales of new product offerings.

“We feel we have positioned ourselves to capitalize on the improving economic environment and to increase our market share with innovative products that meet consumers’ price value needs,” Harrington said.

Giro, which makes snow helmets, benefited from a great winter season and, in some area, rules requiring helmets to ski. Bicycle wheels, made by Easton Cycling, have been a focus for the company and are performing well with double digit sales growth in the first quarter, he said.

Although last year included losses, the long-term picture for sporting goods is positive. The worldwide retail sporting goods market was estimated at $284 billion in 2008, according to NPD Group, a consumer research firm. In the U.S., the manufacturers’ sale of sporting goods has grown from $48.4 billion in 2000 to $66.3 billion in 2008, according to the Sporting Goods Manufacturers Association. Sporting equipment in the U.S. grew from $13.7 billion in 2000 to $20.8 billion in 2008, with 2008 realizing a decline in sales of approximately 2.4 percent.

This article is published here.

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This entry was posted on May 16, 2010 by in Business.

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