Gart Sports Net Income Jumps 46% on Flat Comps

Gart Sports Company announced net income for the fourth quarter ended February 1, 2003 increased to $12.8 million, or $1.03 per fully diluted share, compared with $11.0 million, or $0.95 per fully diluted share, in the prior year’s fourth quarter, excluding the effect of $3.3 million net of tax, or $0.29 per diluted share, of one-time integration costs associated with the Company’s 2001 acquisition of Oshman’s Sporting Goods.

Total sales for the 13 weeks ended February 1, 2003, increased 0.3% to $316.8 million compared with $316.0 million in the prior year’s fourth quarter. Fourth quarter comparable store sales decreased 3.2% from last year.

On June 7, 2001, Gart Sports Company completed its acquisition of Oshman’s. Results include Oshman’s operations from June 8, 2001.

Net income for the 52 weeks ended February 1, 2003, increased to $23.2 million, or $1.86 per fully diluted share, compared with $15.9 million, or $1.54 per fully diluted share, in the prior year, excluding the effect of $7.6 million net of tax, or $0.74 per diluted share, of one-time integration costs associated with the Oshman’s acquisition.

Total sales for the 52 weeks ended February 1, 2003, advanced 12.3% to $1,051.2 million compared with $935.7 million in the prior year. Comparable store sales during the fiscal year were unchanged.

Doug Morton, Chairman, President and Chief Executive Officer of Gart Sports Company, stated, “Our sales for the fourth quarter were impacted by the overall difficult retail environment, as well as unseasonably warm and dry weather throughout much of our winter sports markets. Despite this challenging sales environment, we delivered a solid earnings improvement through continued gross margin expansion and our on-going emphasis on controlling expenses.”

On February 20, 2003, Gart Sports announced it had approved a definitive agreement with The Sports Authority, Inc. providing for a merger of equals to create the nation’s preeminent sporting goods retailer. On a combined basis, Gart Sports and Sports Authority generated revenue of approximately $2.5 billion during the four fiscal quarters ended November 2, 2002, operating 385 stores in 45 states nationwide.

                               Gart Sports Company
                 Condensed Consolidated Statements of Operations
             (Dollars in thousands, except share and per share data)

                              13 Weeks Ended             52 Weeks Ended
                         February 1,   February 2,  February 1,  February 2,
                            2003          2002          2003          2002
    Net sales             $316,800      $315,995   $1,051,244      $935,717
    Cost of goods sold,
     buying, and
     occupancy             228,376       229,659      776,340       696,296
      Gross profit          88,424        86,336      274,904       239,421
      Gross profit %         27.9%         27.3%        26.2%         25.6%
    Operating expenses:
      Selling, general and
       administrative
       expenses             64,865        65,311      227,785       203,589
      Selling, general and
       administrative
       expenses %            20.5%         20.7%        21.7%         21.8%
     Integration costs          --         5,410           --        12,490
      Store pre-opening
       expenses                533           408        1,197           840
    Operating income        23,026        15,207       45,922        22,502
    Non-operating income
      (expense):
      Interest, net         (2,228)       (2,832)      (8,887)      (10,627)
      Other income             134           188          764         1,676
    Income before
     income taxes           20,932        12,563       37,799        13,551
      Income tax expense    (8,086)       (4,900)     (14,632)       (5,285)
    Net income             $12,846        $7,663      $23,167        $8,266

    *Pro-forma FY 2001 results excluding the effect of
     the one time integration costs associated with the
     acquisition of Oshman's:

    Income before
     income taxes
     as reported                         $12,563                    $13,551
      Integration costs                    5,410                     12,490
    Pro-forma income
     before income taxes                  17,973                     26,041
      Income tax expense                  (7,009)                   (10,156)
    Net income                           $10,964                    $15,885