Oppenheimer Conference TSA (NYSE)

Transcription

1 Oppenheimer Conference TSA (NYSE) September 3, 2005

2 Note: As of /29/05; excludes name changes due to rebranding Merger Completed August Stores 97 Stores Total Stores store in Alaska 3 stores in Hawaii

3 Created National Sporting Goods Retailer Leverage the Sports Authority brand with the goal of creating a unified national brand across the country Total Stores (as of 7/30/05)

4 Strategic Initiatives # Changing culture to focus on Driving Sales. Creating a Sports Authority First mentality Drive newness in the stores Create more excitement! Make stores more shoppable shoppable #2 Focusing on our identified Destination businesses: Golf, Fitness, Team Sports, Active Apparel, Winter Sports and Footwear

5 Process & Discipline Improvements #3 Improve Supply Chain to reduce Inventory and Debt SDQ, Musicals, expanded Back-stock and Intactix Assortment Planning will ensure we have the right product by size & color, in our stores quicker Evaluate assortments in Good, Better & Best categories and align offerings according to market Commit to sku rationalization in all departments These important initiatives will reduce year-end inventories by $50 million and Debt by $35 million!

6 Strategic Initiatives #4 Improve Advertising & Re-Brand all stores to the Sports Authority nameplate #5 Continue Remodeling program TSA legacy stores (additional 60 this year) Footwear Statement Walls (275 by year-end) Expansion of Golf Days #6 Continue New Store Expansion 7 New Stores in Key Markets

7 Destination Category - Golf

8 Destination Category - Golf 33 stores remodeled to Golf Days in 2004 (66 total at the end of 2004) Experienced a 20%+ comp sales lift in Golf Sales 2005 Plans call for 8 New Golf Day store locations & 47 additional remodels to Golf Day formats Consistent Assortment in Top 75 Doors 2005 Plan focuses on growing our Premium brand businesses

9 Destination Category - Fitness Implement strategy of building & expanding assortments in Better / Best and Raising AUR s Added Bowflex,, Horizon, Proform & Reebok Treadmills Added Hoist Gyms Added 40 Certified Fitness Specialists Consistent assortment in over 300 doors

10 Gold s Gym Power Axis Smith Gym - March 2005

11 Destination Category - Team Consistent assortments chain wide Rationalize sku assortments and leverage larger buys against fewer skus Reducing sku count by 7% Re-Allocate product toward premium assortments... Raise AUR

12 Assortment Baseball with Dramatic Decrease in Sku s 64 Baseball Glove SKUs Rationalized (35%) 23 Baseball Bats Styles Rationalized (23%) 3 Batting Glove Styles Rationalized (60%) Number of SKUs Best Better Good Number of SKUs Best Better Good 22 Number of SKUs Best Better Good

13 Destination Category - Active Apparel Increase penetration of better brands (Under Armour,, Nike, and Adidas) Continue to grow the Performance categories Expand Women s business Build and flow assortments to match geographic climates especially within seasonal classifications Complete private label consolidation

14 Double-digit Sales increases realized in Northeast during Q Focus on top six vendors Destination Category - Winter Sports Reduce apparel vendors by 50% & Ski & Snowboard vendors by 0% Flow merchandise based on rate of sale Create a culture of doing more business with less, fresher inventory Create cold weather accessory centers

15 Footwear Statement Walls

16 Footwear Statement Walls These full-service footwear walls allow us access to higher-end Nike footwear products We believe the full-service walls combined with an open-stock environment provides the best selling format Phase I Completed 222 Stores in September 2004 Phase II - Expand to 275 Stores by end of 2005

17 Advertising Initiatives Increased Print Reach & Frequency Consistent Print Format Increased Spend on Radio and TV Regionalized Ad Plans Committed to driving Ad In-Stocks to 00% Expansion of Direct Mail Strong Category Statements Improved Visual Navigation

18 2004 Improved Layout and Design 2005

19 Direct Mail Focus on Driving Better Product & Image

20 Rebranding to the Sports Authority 50+ Stores in initial phase Allows consistent Nameplate Produces Synergies

21 Financials, Remodels & New Stores

22 2nd Qtr 2005 Results ($ ($MM s) 2004 Actuals Street Actuals Sales $67.0 $624.3 $605.0 Comp % 0.2%.7% -3.8% GM% 28.2% 27.9% 27.8% Op. Exp. % 23.6% 23.7% 23.9% Pre-Tax Income $23.5 $2.3 $9.5 Net Income $4.2 $2.9 $.9 EPS $0.53 $0.49 $0.45 EBITDA $45.7 $4.2 $37.7 EBITDA % 7.4% 7.3% 6.2% Note: All Years Include Lease Accounting Impact and Exclude Integration Expense

23 2nd Qtr Balance Sheet ($MM's) 2005 Act 2004 Act Inventory $738.4 $77.4 -$33.0 Other Current PP&E & Other LT Total Assets $,478.7 $,498.5 Bank Debt $344.4 $ $45.4 Accounts Payable % to Inventory 4.% 45.3% Other Liabilities Total Liabilities $963.4 $,038.0 Equity Total Equity/Liabs $,478.7 $,498.5 Debt to Capital 40.% 45.7%

24 Third Quarter Fiscal 2005 Full Year Fiscal 2005 Company Guidance EPS $0.09 vs. $0.0 EPS LY; Comp Sales +% to +2% Gross Margin improvement of +40 bp s vs SG&A expenses flat to up +0 bp s vs EPS for 2005 of $.97 - $2.0; vs. $.77 L.Y. Comp sales approximately +.5% New Store Openings expected to be 3, 4 relocations and 7 closings Inventories down approx. $50MM Debt at Y.E. of approx. $270MM (Vs. $305MM in 04) NOL s available at Q are $69MM+

25 998 to 2005 Sales Growth (+2% Compounded Annual Growth) $MM s $3,000 $2,500 $2,435 $2,525 $2,000 $,500 $,000 $500 $658 $68 $75 $936 $,05 $,760 $ * * Guidance

26 998 to 2005 EPS Growth (+82% Compounded Annual Growth) $2.50 $2.00 $.50 $.8 $.5 $.85 $2.2 $.77 $.99 $.00 $0.50 $0.23 $0.03 $ * Note: Merger integration costs & non-recurring items excluded from applicable years *Guidance of $.97 - $2.0 EPS

27 Gross Margin Performance We Continue to Leverage Our Size, Experience from Mergers, Private Label Programs and Infrastructure 29.0% 28.0% 27.0% 26.0% 25.0% 24.0% 23.0% 22.0% 2.0% 25.4% 25.6% 27.6% 27.9% 26.2% 24.0% 23.4%

28 TSA Remodel Strategy Total TSA Stores 205 Closed due to Overlap/profitability (25) Stores to Remodel 80 FY04 Stores Fixtured 73 FY04 Stores Remodeled 47 FY05 Stores to be Remodeled Sales Lift Req d for 30% ROI +4.0% Remodels to date are producing a +4 to +5% Lift

29 Remodel Initiative

30 Remodel Initiative

31 National Distribution Network Distribution infrastructure with capacity to support & leverage future growth plans Denver, CO 39,000 sq. ft. Woodbridge, IL 260,000 sq. ft. Burlington, NJ 46,000 sq. ft. Fontana, CA 66,000 sq. ft. Houston, TX 269,000 sq. ft. Atlanta, GA 300,000 sq. ft.

32 2005 New & Relocated Stores 7 Total Stores We ve focused our growth in the fastest growing markets where we can also leverage our current infrastructures! 3 2 Minnesota New York PA 3 - Mass. 2 - NJ California Arizona Colorado Texas 2 Florida As of 7/30/05

33 New Store - Garden State Plaza

34 Summary Initiatives appear On Track Comp Sales positive in Q and Q2 We continue to make progress in our Five Destination Categories Supply-Chain Initiatives are Improving! Year-end Inventories will decrease by $50 million! Year-end Debt will decrease by $35 million! Stores are being Re-branded Store Remodels, Footwear Statement Walls & Golf Day Initiatives are also driving comp sales New Store Expansion Continues

35 Oppenheimer Conference TSA (NYSE) September 3, 2005