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CAN SPORTS RETAILERS RECOVER FROM LABOR STRIFE?
Published March 27, 1995
"After a disappointing holiday season, the slumping sports- retailing business faces a big challenge: Can spring and summer sales make up for a mild winter and labor disputes," according to Molly Baker in her small-stock focus in this morning's WALL STREET JOURNAL. Sports superstores are getting "mixed reviews" on Wall Street and a disappointing 4th quarter at Sports & Recreation and a bankruptcy filing by SportsTown have brought most stocks to new lows. Some analysts are showing no interest in sports retailers' stocks, but others see this as a time to buy while they are "at real value and the superstore penetration of the sporting goods market is a mere 5% to 6%." So far this year, Sports & Recreation is down 59% while The Sports Authority has slipped 7.4% -- both on NYSE. SportMart has fallen 24% on Nasdaq. Analysts say superstore companies are going to have to meet, if not exceed, expectations for at least a few quarters before investors "take notice." The return of Michael Jordan "has added a few extra points to mild" 1st quarter sales (WALL STREET JOURNAL, 3/27). NOT IN THE CARDS? Topps' 4thQ net income fell 78% on lower sales as the company "continued to feel the effects of labor disputes in professional sports." The company said that net income for the three months ended February 25 totaled $1M, compared with $4.6M a year earlier. Sales fell 12% to $56.6M from $64M. For the year, net income fell 41% to $15.7M from $26.6M a year earlier (N.Y. TIMES, 3/27).