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EDEN PRAIRIE, MN-Specialty retailer Golf Galaxy reported net sales increased 46.5% to $69.6 million in its second quarter of fiscal 2006, compared to $47.5 million in the same period of the prior year. Net income posted at $5.4 million, or 59 cents per diluted share, compared to $3.5 million, or 46 cents per diluted share. Comparable store sales increased 7.4%, up from an increase of 5.9% in the prior year.

“We are pleased with our results in the second quarter, which is our most important quarter from both a sales and profit standpoint,” said Randy Zanatta, president, chief executive officer and chairman. During in its second quarter conference call Thursday, the company attributed strong sales to pre-owned clubs, men’s and women’s apparel, and PGA services.

For the third quarter, the company expects sales to reach $30 million to $32 million, an increase of 48% to 58% compared to the same period last year. The company anticipates comp store sales to increase 2% to 6%, while incurring a net loss of $1.8 million $2.2 million. For the entire year, the company expects sales to ring up at $197 million to $202 million and comp sales to increase 6% to 8%.

Golf Galaxy execs said a decline in expected sales could be attributed to the impact of Hurricane Katrina, adding, “Higher gasoline and energy prices are resulting in higher freight costs and utilities expenses at the company’s stores, and may impact consumer spending.” The company also noted it closed one store in Houston yesterday and two on Wednesday because of the area’s evacuation response to Hurricane Rita.

On Aug. 3, Golf Galaxy completed its initial public offering of 4.54 million shares of common stock, of which three million were offered for $14 per share. The company opened 11 new stores in the first six months of the fiscal year. At the end of second quarter fiscal Golf Galaxy operated 45 stores in 19 states. Execs say the company is also on track to open 16 new stores, four of which will be opened in November. Those stores will be located in Denver, Omaha, Tulsa and Philadelphia.

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