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Forzani CEO Bob Sartor

Todd Korol

Sporting goods retailer Forzani Group Ltd.'s latest financial results held steady even as it faced the worst recession in 70 years, an unseasonably warm winter and significant one-time costs.

"While flat results are never satisfying, our team managed well under the circumstances and for the year," chief executive officer Bob Sartor said in a statement Tuesday.

"We outperformed both our Canadian retail peer group and the North American sporting goods peer group in the key same-store sales metric."

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The Calgary-based company said its fourth-quarter net income was $22.9-million, or 75 cents per share, down from $24.2-million, or 80 cents per share, in the year-ago period. Revenue was $372.9-million during the three months ended Jan. 31, down from $380.8-million a year ago.

For Forzani's entire 2010 financial year, which ended on Jan. 31, net income was $28.8-million, compared to $29.6-million in 2009. In both years, the earnings amounted to 94 cents per share. Revenue for 2010 amounted to $1.36-billion, against $1.35-billion in 2009.

"Looking to fiscal 2011, early results from the start of the first quarter were strong and exceeded expectations in both our corporate and franchise stores," Mr. Sartor said.

"We believe our progress against strategic objectives is positioning our businesses to take full advantage of both the economic recovery this year and further growth opportunities well into the future."

Analysts polled by Thomson Reuters were, on average, expecting earnings per share of 73 cents for the three months ended Jan. 31, 2010. They were calling for earnings of 93 cents per share for the year.

"We believe that weather was warm enough to negatively impact outerwear and hard good sales," RBC Capital Markets analyst Tal Woolley wrote in a research note ahead of the earnings.

But he expected the bottom line to benefit from Forzani's efforts to keep its inventories lean and to fine-tune the mix of products it sells at its stores, which include Sport Chek, Coast Mountain Sports and National Sports.

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"FGL is looking to do a better job tailoring the merchandising and marketing mix to suit regional tastes," Mr. Woolley said.

"FGL plans to offer product that is more focused on regional preferences, moving away from what may have been a more 'one size fits all' approach previously."

The recession took a big toll on Forzani, with consumers reluctant to splurge on sports equipment and athletic apparel.

Mr. Woolley expects Forzani's sales to improve slowly this year "as the employment picture begins to improve and the consumer gains their financial footing again."

Forzani operates 540 stores across Canada under numerous banners, including: Athletes World, Sport Mart, Sports Experts, Intersport, Fitness Source and Nevada Bob's Golf.

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