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RAWLINGS STOCK FALLS TO RECORD LOW; STRIKE DAMAGES PROFITS
Published May 24, 1995
Rawlings Sporting Goods Co. stock fell to a record low after the company announced its revenue and profit would be lower this year because of the baseball strike. Shares fell $1.50 to $10.12, a drop of 12.9%. Rawlings blamed weak baseball-equipment sales at retail outlets. That "revised forecast surprised analysts, who thought the company might avoid a ripple effect" from the strike. Jack Russo, who follows Rawlings for A.G. Edwards & Sons in St. Louis: "I don't know if it's because of the strike or just kids playing other sports. ... I think all of us were crossing our fingers." A.G. Edwards, which had earlier considered Rawlings stock a "buy," has changed its position to give the company's stock a neutral "hold." Rawlings has lowered its revenue projection for the fiscal year by 3.13% to $145M (Christopher Carey, ST. LOUIS POST-DISPATCH, 5/24). MERCHANDISE SALES SLOW ALL AROUND: Although the sale of licensed baseball merchandise is down due to the strike, retailers and analysts hope revenue will pick up as the season progresses. According to Nancy McCusker, Sports Services Dir of Merchandising, the "good news for the clubs and merchants is that fans who show up at the games are buying food, caps, shirts and other goods at about the same rate per person ... as they did this time last year." Industry watchers all note that exciting pennant races would help the $2.5B business return to past performance. John Horan, publisher of SPORTING GOODS INTELLIGENCE, said there are "lots of problems," but by the playoffs, "sales will back to normal" (Robyn Meredith, USA TODAY, 5/24).