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).
