The company also expects its comparable store sales comparison for the year to be slightly negative, versus a previous estimate of a 3% to 5% gain. Last year's comparable store sales increase was 11.5%. Total revenue for the 2004 fiscal year is now expected to be in the range of $640 million to $670 million, compared with $490 million in the prior year. Moreover, the outdoors retails says that it expects total revenue in the third quarter to increase 24% over the previous year to approximately $178 million, reflecting the addition of new stores, while comparable store sales to decline 7.5%, compared with an increase of 12.5% in the third quarter of the previous year.

In revising its outlook, the company cited the impact of unseasonably warm weather on sales of outerwear and footwear. In addition, co-branded credit card promotions in 2004 weren't as effective in spurring the sale of high-ticket items as the 2003 promotions were, when the credit card program was introduced.

"We are disappointed in the sales performance of our stores," said Mark Baker, president and CEO, in a statement. "We expect to report modestly positive income for the third quarter as a result of reacting to the sales environment, and managing our operating costs and inventory levels." He added that by the end of the third quarter the company had opened 19 new stores during the year, up from our original plan of 15. Currently, the retailer has 82 stores in 14 states.