Goldman Sachs downgraded Galyan's Trading (GLYN ) to underperform from in-line.
Analyst Matthew Fassler says he's concerned by the magnitude of recent sales shortfalls. Though the weather is a reasonable root cause in this highly seasonal business, he thinks Galyan's young average store age should give it an edge vs. the competition; he notes its first-quarter showing tracked toward the lower end of the sporting-goods sector.
Fassler says earnings per share volatility associated with this sales shortfall is surprising -- Galyan's is taking significant markdowns and has still achieved a sharp, same-store sales decline, leading him to question the concept's traction. He thinks a more controlled pace of expansion would prove preferable.