Bolstered by strength in its Team Sports segment, Easton-Bell Sports reported a 5 percent gain in first-quarter sales to $194.1 million for the period ended April 3. It marked the company’s first quarterly sales growth in three periods. Net income was $122,000 compared with $975,000, but was hit by an 18 percent rise in interest expense to $11.5 million. Operating income rose by 18.0 percent to $11.7 million.
Gross margin gained 0.8 percentage points to 33.4 percent, lifted by more sales of higher-margin products, lower sourced-product costs, improved efficiencies in owned Mexican operations and fewer close-out sales coupled with a favorable gain from exchange rates.
By segment, Team Sports sales rose by 11 percent to $119.4 million, especially on gains from bags, batters’ helmets and softball bats coupled with sales improvement in American football gear and apparel. This was an increase of 3 percent on a currency-neutral basis. Action Sports sales dipped by 3 percent to $74.1 million on lower helmet and accessory sales in the specialty cycling channel, partially offset by higher sales of snow sports helmets and strong revenues from licensed cycling helmets, accessories and fitness products sold into the mass channel. At constant currencies, this was a drop of 4 percent.
Easton-Bell remains encouraged by an improving inventory picture and stronger balance sheet. As of April 3, liquidity was above $150 million, and inventories were off by nearly 18 percent compared with last year, to $119.3 million.