Gander Mountain's sales slump

Even Gander Mountain Co., the St. Paul retailer of hunting, camping and fishing equipment, was surprised at just how much consumers scaled back in recent months.

The company said Wednesday that its same-store sales declined 11.7 percent in the second quarter, which ended Aug. 2.

"We anticipated it was going to be negative, but not quite that negative," CEO Mark Baker said in an interview.

Baker noted that 20 percent of the decline in same-store sales came from pulling all-terrain vehicles from the sales floors of some stores. As a result, ATV sales declined 60 percent in the quarter.

Still, the company narrowed its second-quarter net loss to $4.9 million, or 20 cents per share, compared with $9.7 million, or 48 cents per share, a year ago.

Revenue in the quarter rose 17 percent to $252.9 million -- making it the strongest second quarter in the company's history. The Overton's direct-marketing business, which Gander bought in December, contributed $39.7 million in new revenue.

Overton's boating and marine-accessories business typically peaks in the second-quarter, but like other leisure-related retail industries, it has seen soft sales as consumers struggle to deal with climbing prices for the basics of food, gasoline and housing.

Gander launched an online site earlier this month and has begun national distribution of its first catalog in more than a decade.

"Outdoor activities will go on, licenses sales will go on ...deer hunting's never been better in the north," he said. "We just may see people buying down a notch."

Gander's sales plunged dramatically in the second half of last year when the economy soured, causing the retailer to cut its new-store openings from 15-to-18 a year to just three this year.

The company has reduced inventory by 15 percent compared with a year ago, which could allow the company to keep costs down and potentially grow margins, Baker said.

Jackie Crosby • 612-673-7335

Revenue $22.4 $29.4 -23.9 Income -0.8 0.9 -- Earn/share -0.19 0.22 -- Figures in millions except for earnings per share.

Revenue $37,085 $27,416 +35.3 Cont. ops. 4,256.0 2,215.0 +92.1 Disc. ops. -20.0 38.0 -- Extra* 5,340.0 -- -- Income 9,576.0 2,253.0 +325.0 Earn/share 0.75 0.18 +316.7 Figures in thousands except earnings per share.