Outdoor supply and apparel firm Gander Mountain is bullish on its direct channels, and why not? They turned a profit during second-quarter 2009, unlike its retail operations.
First, the big picture. The company’s second-quarter sales were $248.4 million, down from $252.9 million a year ago. It recorded a net loss of $7.3 million, deeper than the $4.9 million in second quarter 2009. The most recent quarter ended Aug. 1.
Broken out by channel, direct sales for the quarter were $37.6 million, slightly off from the $39.7 million pulled in a year ago. Direct channels generated $1.7 million in operating income during the quarter, also down from the $2 million seen a year ago.
Chances are Gander Mountain executives aren’t squawking too much, though: For the most recent quarter retail sales, which amounted to $210.8 million, were responsible for an operating loss of $9.1 million. A year ago, the $213.1 million in sales retail generated resulted in a $6.8 million operating loss.
The direct results for second quarter 2008 include Overton’s Internet and catalog business, , which Gander Mountain took over during its Overton’s acquisitions in December 2008, as well as the Gander Mountain catalog and Internet operations, which launched in August 2008.
In Securities and Exchange Commission filings, Gander Mountain specifically mentioned growing its direct business through expanded product offerings and additional catalogs.
But the company also warned that its Overton’s operations, which focus on boating and water sports, traditionally show their highest sales activity during the first and second quarters of its fiscal year.
The company also noted that the direct segment includes sales from the Gander Mountain Direct Web site and catalog business, which were not present during second-quarter 2008. The company expects to invest up to $2 million in its direct operations during the upcoming 12 months in an effort to expand its multichannel operations.
The Hair-Splitter’s Take: Sneer, if you want, at the benefit of a full quarter’s worth of top-line direct sales from the Gander Mountain Direct business. The fact remains that these operations remain bottom-line profitable. And kudos to a company still willing to publicly say it’s investigating new catalog sales. May the company be rewarded for its initiative. As the late (and largely forgotten) comedian Joe Penner might say, “Wanna buy a duck boat?”
