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Easton-Bell action sports sales dip in Q1

Published May 18, 2009

VAN NUYS, CA (BRAIN)—First quarter sales were down 5.2 percent in Easton Bell Sports’ Action Sports segment as the company contended with delays of shipments of OEM cycling components to bike manufacturers and slow sales of fitness equipment in the mass channel.

The Action Sports segment encompasses Easton Bell’s bicycle business, including helmets, components and accessories under the Easton, Bell, Giro and Blackburn brands, as well as snowsports and powersports equipment.

The division posted sales of $77 million for the first quarter of the year, compared with $81.3 million for the same time period last year. A boost in sales in Easton Bell’s Team Sports segment resulted in a 1.5 percent increase in first quarter sales companywide.

“Gross margin was down 90 points for the quarter due to the sale of products prior to renegotiating supplier costs, consumers trading down to lower pricepoints and the impact of closeout sales in snow and powersports helmets in the specialty channel,” said Paul Harrington, president and chief executive officer of Easton Bell, during a conference call last Friday to announce the company’s first quarter results.

Easton Bell’s first quarter bike business was also impacted by conservative ordering from European distributors and a push back in OEM shipments from March to June, Harrington said.

Inventory was up 22.9 million in the first quarter, the majority of which occurred in the mass channel, although levels have begun to normalize with the start of the peak selling season, said Mark Tripp, chief financial officer of Easton Bell. Tripp said the company isn’t planning on offering any discounts to help move the excess inventory.

Even given the challenging retail environment, some new products helped the bike division gain some steam. Bell bike helmets using the new True Fit technology targeted kids in the mass channel, and a $1 million online and television marketing campaign resulted in strong sell-through at retail, Harrington said. In the specialty channel, Giro introduced a new line of mountain and road biking gloves during the first quarter.

To read about what Easton Bell has seen so far as the bright spots in its bike business in the second quarter, check out the June 15 issue of Bicycle Retailer and Industry News.

—Nicole Formosa

Topics associated with this article: Earnings/Financial Reports

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