Third-quarter direct response operations recorded a $2.3 million net loss at Gander Mountain, while the outdoors products marketer’s retail business pulled in $5.5 million in income during the quarter. Direct generated $15.6 million in sales, while retail took in $261 million.
A year ago, retail operations generated $3.7 million in income while direct operations lost $2.9 million. During that year-ago quarter, direct sales amounted to $14.4 million while retail pulled in $255.5 million.
In Securities and Exchange Commission documents, Gander Mountain said it was limiting its retail expansion activities to one store during fiscal 2009, as it planned to focus on growing its direct marketing business. The company launched new catalog and Internet operations under the Gander Mountain brand in August 2008.
“Direct the next 12 months our focus will be to continue to grow the direct segment,” the company wrote in its SEC filing. “We expect we will continue to make expenditures related to our direct segment of up to $2 million in the next 12 months to further this important business objective.”
Gander Mountain attributed part of the direct segment’s falloff to the seasonality of its offerings, which include a variety of boating, marine and watersport products.
Gander Mountain described its direct segment operations as “immature” and “early-stage cycle”, and said part of the reason for the drop in income was investments in direct channels which have not fully paid out yet.
Overall, during the third quarter, Gander Mountain reported net income of just under $3.2 million, up from the $765,000 it generated during third-quarter 2008. Its sales rose from $269.9 million to $276.6 million.
The company kept the cost of its good sold to 72.8% of total sales, down from 74.2% a year ago.
As previously reported, Gander Mountain is taking itself private, and has authorized a reverse stock split.
