VAN NUYS, CA (BRAIN)—Easton Bell sales declined 11.3 percent for the third quarter of 2009, but the company began to see some signs of stabilization during the period including higher margins in the Action Sports segment, according to an earnings report issued on Wednesday.
“We experienced softness in sales and margin for certain segments of our business during the quarter, but at a slower rate as our new product introductions, sourcing initiatives and cost reductions began to positively impact results,” said Paul Harrington, president and chief executive officer of Easton Bell. “In addition we were able to successfully manage our working capital, which allowed us to further reduce debt and improve our cash position during the quarter.”
Net sales in the Action Sports segment, which includes Easton Bell’s cycling business, were down 1.8 percent for the quarter—from $90.7 million for the third quarter of 2008 to $89.2 million this year.
The decrease was due to lower sales of OEM cycling components, cycling accessories and powersports helmets, partially offset by sales of snowsports helmets and Giro cycling gloves, the company said in a press release.
Still, new product launches in the third quarter have provided a bit of a bright spot, Harrington said during a conference call with analysts on Wednesday.
On the Bell side, preseason orders increased in the low single digits in part due to demand for the new Variant mountain bike helmet. At $80 retail, the helmet fills a desirable pricepoint and allows for increased presence in the important mountain bike category, Harrington said.
Under the Easton name, the company introduced a new series of high performance carbon time trial wheels, a new carbon clincher and a mountain bike tubeless wheel.
“Preseason bookings in the U.S. indicate the best product launch ever for Easton,” Harrington said.
The company lowered prices on some wheelsets to $850 to appeal to a more price conscious consumer—a philosophy that will continue into 2010—but it is not abandoning the premium market, Harrington said.
Easton Bell cycling brands also include Blackburn.
In the Action Sports segment, margins were up 140 basis points for the quarter, and are down 50 basis points for the year. That primarily relates to lower sourced finished goods costs, lower closeout sales of mass channel products and inventory write-offs.