Big 5 Sporting Goods Corporation (Nasdaq: BGFV) (the “Company,”
“we,” “our,” “us,” “Big 5”), a leading sporting goods retailer,
today reported financial results for the fiscal 2022 first quarter
ended April 3, 2022.
Steven G. Miller, the Company’s Chairman,
President and Chief Executive Officer, said, “We are pleased to
report first quarter earnings results that were slightly ahead of
the high end of the guidance range that we provided and
significantly ahead of any pre-pandemic first quarter in our
history. As we emerge from the pandemic, the foundation of our
business remains extremely solid. While our results versus 2021
reflect very difficult comparisons against last year’s record first
quarter, when sales surged due to COVID-related factors, in this
year’s first quarter we generated historically strong earnings
despite facing a variety of headwinds throughout the period,
including unfavorable winter weather, Omicron-related challenges,
supply chain disruptions, and inflationary pressures.”
Net sales for the fiscal 2022 first quarter were
$242.0 million compared to net sales of $272.8 million for the
first quarter of fiscal 2021. Same store sales decreased 11.4% for
the first quarter of fiscal 2022 compared to the first quarter of
fiscal 2021 and were flat compared to the pre-pandemic first
quarter of fiscal 2019.
Gross profit for the fiscal 2022 first quarter
was $85.9 million, compared to $97.9 million in the first quarter
of the prior year. The Company’s gross profit margin was 35.5% in
the fiscal 2022 first quarter versus 35.9% in the first quarter of
the prior year. The decrease in gross profit margin compared with
the prior year primarily reflects higher store occupancy expense as
a percentage of net sales, partially offset by the favorable impact
of higher merchandise margins. The Company’s merchandise margins
increased by 119 basis points for the first quarter of fiscal 2022
compared to the first quarter of fiscal 2021 and increased by 461
basis points versus the first quarter of fiscal 2019.
Overall selling and administrative expense for
the quarter increased by $5.2 million from the prior year primarily
due to broad-based inflationary impacts, including increased
employee labor and benefit-related expense year over year, along
with the elimination of an employment agreement-related liability
last year. As a percentage of sales, selling and administrative
expense increased to 31.1% in the fiscal 2022 first quarter,
compared to 25.7% in the fiscal 2021 first quarter, due to the
combination of lower sales and higher expense.
Net income for the first quarter of fiscal 2022
was $9.1 million, or $0.41 per diluted share, above the high end of
the Company’s guidance range of $0.30 to $0.40 per diluted share.
This compares to record first quarter net income of $21.5 million,
or $0.96 per diluted share, in the first quarter of fiscal 2021,
which included a previously reported benefit of $0.06 per diluted
share. Net income for the first quarter of fiscal 2019 was $1.7
million, or $0.08 per diluted share.
Adjusted EBITDA was $15.0 million for the first
quarter of fiscal 2022, compared to $30.3 million in the prior year
period. EBITDA and Adjusted EBITDA are non-GAAP financial measures.
See “Non-GAAP Financial Measures” below for more details and a
reconciliation of non-GAAP EBITDA and Adjusted EBITDA to the most
comparable GAAP measure, net income.
Balance SheetThe Company ended
the fiscal 2022 first quarter with no borrowings under its credit
facility and with cash and cash equivalents of $62.0 million. This
compares to no borrowings under the Company’s credit facility and
$97.4 million of cash and cash equivalents as of the end of the
fiscal 2021 fourth quarter. Merchandise inventories as of the end
of the first quarter increased by 18.2% year over year, reflecting
more normalized inventory levels relative to sales, along with
higher carryover of winter-related inventory. In the fiscal 2022
first quarter, the Company repurchased 94,983 shares of its common
stock.
Quarterly Cash DividendThe
Company’s Board of Directors has declared a quarterly cash dividend
of $0.25 per share of outstanding common stock, which will be paid
on June 15, 2022 to stockholders of record as of June 1, 2022.
Second Quarter GuidanceFor the
fiscal 2022 second quarter, the Company expects same store sales to
decrease in the high teens compared to the record sales of the
fiscal 2021 second quarter, when net sales were more than $82
million, or 34%, higher than any pre-pandemic second quarter in the
Company’s history. As a reminder, sales in the second quarter of
fiscal 2021 benefited from strong pent-up demand following an
easing of pandemic-related restrictions in many of the Company’s
markets. The Company’s sales guidance reflects an expected
same-store sales increase in the high single-digit range versus the
pre-pandemic fiscal 2019 second quarter.
Fiscal 2022 second quarter earnings per diluted
share are expected in the range of $0.40 to $0.50, which compares
to record second quarter earnings per diluted share of $1.63 in the
second quarter of fiscal 2021.
Mr. Miller concluded, “Our second quarter to
date business continues to perform well above historical rates and
we expect to generate sales and earnings significantly exceeding
any pre-pandemic second quarter in our history. While last year’s
record second quarter certainly was remarkable, beating last year’s
pandemic-driven results is not a prerequisite to producing another
very profitable and successful quarter for the business. We are in
a great position, as we stand to continue to benefit from many of
the drivers of our success over the last two years, including
favorable product trends, higher merchandise margins, and
meaningfully reduced print advertising spend. We look forward to
continuing to generate very positive bottom-line results.”
Store OpeningsThe Company
currently has 431 stores in operation. During fiscal 2022, the
Company expects to open approximately four stores and close
approximately two stores.
Conference Call InformationThe
Company will host a conference call and audio webcast today, May 3,
2022, at 2:00 p.m. Pacific (5:00 p.m. Eastern), to discuss
financial results for the first quarter of fiscal 2022. To access
the conference call, participants in North America may dial (877)
407-9039 and international participants may dial (201) 689-8470.
Participants are encouraged to dial in to the conference call ten
minutes prior to the scheduled start time. The call will also be
broadcast live over the Internet and accessible through the
Investor Relations section of the Company’s website at
www.big5sportinggoods.com. Visitors to the website should select
the “Investor Relations” link to access the webcast. The webcast
will be archived and accessible on the same website for 30 days
following the call. A telephonic replay will be available through
May 10, 2022 by calling (844) 512-2921 to access the playback; the
passcode is 13728790.
About Big 5 Sporting Goods
CorporationBig 5 is a leading sporting goods retailer in
the western United States, operating 431 stores under the “Big 5
Sporting Goods” name as of the fiscal quarter ended April 3, 2022.
Big 5 provides a full-line product offering in a traditional
sporting goods store format that averages 11,000 square feet. Big
5’s product mix includes athletic shoes, apparel and accessories,
as well as a broad selection of outdoor and athletic equipment for
team sports, fitness, camping, hunting, fishing, home recreation,
tennis, golf, and winter and summer recreation.
Except for historical information contained
herein, the statements in this release are forward-looking and made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
known and unknown risks and uncertainties and other factors that
may cause Big 5’s actual results in current or future periods to
differ materially from forecasted results. These risks and
uncertainties include, among other things, the economic impacts of
COVID-19, including any potential variants, on Big 5’s business
operations, including as a result of regulations that may be issued
in response to COVID-19, changes in the consumer spending
environment, fluctuations in consumer holiday spending patterns,
increased competition from e-commerce retailers, breach of data
security or other unauthorized disclosure of sensitive personal or
confidential information, the competitive environment in the
sporting goods industry in general and in Big 5’s specific market
areas, inflation, product availability and growth opportunities,
changes in the current market for (or regulation of)
firearm-related products, a reduction or loss of product from a key
supplier, disruption in product flow, seasonal fluctuations,
weather conditions, changes in cost of goods, operating expense
fluctuations, increases in labor and benefit-related expense,
changes in laws or regulations, including those related to tariffs
and duties, public health issues (including those caused by
COVID-19 or any potential variants), impacts from civil unrest or
widespread vandalism, lower than expected profitability of Big 5’s
e-commerce platform or cannibalization of sales from Big 5’s
existing store base which could occur as a result of operating the
e-commerce platform, litigation risks, stockholder campaigns and
proxy contests, risks related to Big 5’s historically leveraged
financial condition, changes in interest rates, credit
availability, higher expense associated with sources of credit
resulting from uncertainty in financial markets and economic
conditions in general. Those and other risks and uncertainties are
more fully described in Big 5’s filings with the Securities and
Exchange Commission, including its Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q. Big 5 conducts its business in a
highly competitive and rapidly changing environment. Accordingly,
new risk factors may arise. It is not possible for management to
predict all such risk factors, nor to assess the impact of all such
risk factors on Big 5’s business or the extent to which any
individual risk factor, or combination of factors, may cause
results to differ materially from those contained in any
forward-looking statement. Big 5 undertakes no obligation to revise
or update any forward-looking statement that may be made from time
to time by it or on its behalf.
Non-GAAP Financial MeasuresIn
addition to reporting our financial results in accordance with
generally accepted accounting principles ("GAAP"), we are providing
non-GAAP adjusted earnings before interest, income tax expense,
depreciation and amortization (“EBITDA”) and other adjustments
(“Adjusted EBITDA”). EBITDA and Adjusted EBITDA are not prepared in
accordance with GAAP and exclude certain items presented below. We
use EBITDA and Adjusted EBITDA internally for forecasting purposes
and as factors to evaluate our operating performance. We believe
that Adjusted EBITDA provides useful information to both management
and investors by excluding certain expenses, gains and losses that
may not be indicative of core operating results and business
outlook. While we believe that EBITDA and Adjusted EBITDA can be
useful to investors in evaluating our period-to-period operating
results, this information should be considered supplemental and is
not a substitute for financial information prepared in accordance
with GAAP. In addition, our definition or calculation of these
non-GAAP measures may differ from similarly titled measures used by
other companies, limiting the usefulness of this financial measure
for comparison to other companies. We believe the GAAP measure
that is most comparable to non-GAAP EBITDA and Adjusted EBITDA is
net income, and a reconciliation of our non-GAAP EBITDA and
Adjusted EBITDA to GAAP net income is provided below.
|
13 Weeks Ended |
|
April 3, |
|
April 4, |
|
2022 |
|
2021 |
|
(In thousands) |
GAAP net income (as reported) |
$ |
9,103 |
|
|
$ |
21,546 |
|
+ Interest (as reported) |
|
184 |
|
|
|
342 |
|
+ Income tax expense (as
reported) |
|
1,329 |
|
|
|
5,861 |
|
+ Depreciation and
amortization (as reported) |
|
4,410 |
|
|
|
4,259 |
|
EBITDA |
$ |
15,026 |
|
|
$ |
32,008 |
|
- Elimination of liability for
an employment agreement |
|
— |
|
|
|
(995 |
) |
- Gain on recovery of
insurance settlement related to civil unrest |
|
— |
|
|
|
(709 |
) |
Adjusted EBITDA |
$ |
15,026 |
|
|
$ |
30,304 |
|
FINANCIAL TABLES FOLLOW
BIG 5 SPORTING GOODS CORPORATION |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Unaudited) |
(In thousands, except share amounts) |
|
|
|
|
|
|
|
April 3, |
|
January 2, |
|
|
2022 |
|
2022 |
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
62,038 |
|
$ |
97,420 |
|
Accounts receivable, net of allowances of $60 and $62,
respectively |
|
11,709 |
|
|
13,654 |
|
Merchandise inventories, net |
|
301,517 |
|
|
279,981 |
|
Prepaid expenses |
|
14,125 |
|
|
16,293 |
|
Total current assets |
|
389,389 |
|
|
407,348 |
|
|
|
|
|
|
Operating lease right-of-use assets, net |
|
279,257 |
|
|
270,110 |
|
Property and equipment, net |
|
58,010 |
|
|
60,401 |
|
Deferred income taxes |
|
11,064 |
|
|
12,097 |
|
Other assets, net of accumulated amortization of $1,019 and $905,
respectively |
|
4,040 |
|
|
3,997 |
|
Total assets |
$ |
741,760 |
|
$ |
753,953 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
100,304 |
|
$ |
104,359 |
|
Accrued expenses |
|
67,444 |
|
|
85,041 |
|
Current portion of operating lease liabilities |
|
76,032 |
|
|
76,882 |
|
Current portion of finance lease liabilities |
|
3,431 |
|
|
3,518 |
|
Total current liabilities |
|
247,211 |
|
|
269,800 |
|
|
|
|
|
|
Operating lease liabilities, less current portion |
|
213,377 |
|
|
204,134 |
|
Finance lease liabilities, less current portion |
|
5,929 |
|
|
6,456 |
|
Other long-term liabilities |
|
6,342 |
|
|
6,254 |
|
Total liabilities |
|
472,859 |
|
|
486,644 |
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
Common stock, $0.01 par value, authorized 50,000,000 shares; issued
26,451,105 and 26,109,003 shares, respectively; outstanding
22,344,586 and 22,097,467 shares, respectively |
|
264 |
|
|
260 |
|
Additional paid-in capital |
|
124,501 |
|
|
124,909 |
|
Retained earnings |
|
195,815 |
|
|
192,261 |
|
Less: Treasury stock, at cost; 4,106,519 and 4,011,536 shares,
respectively |
|
(51,679 |
) |
|
(50,121 |
) |
Total stockholders' equity |
|
268,901 |
|
|
267,309 |
|
Total liabilities and stockholders' equity |
$ |
741,760 |
|
$ |
753,953 |
|
BIG 5 SPORTING GOODS CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended |
|
|
April 3, |
|
April 4, |
|
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
241,981 |
|
$ |
272,806 |
|
|
|
|
|
|
|
|
Cost of sales |
|
156,048 |
|
|
174,913 |
|
|
|
|
|
|
|
|
Gross profit |
|
85,933 |
|
|
97,893 |
|
|
|
|
|
|
|
|
Selling and administrative expense |
|
75,317 |
|
|
70,144 |
|
|
|
|
|
|
|
|
Operating income |
|
10,616 |
|
|
27,749 |
|
|
|
|
|
|
|
|
Interest expense |
|
184 |
|
|
342 |
|
|
|
|
|
|
|
|
Income before taxes |
|
10,432 |
|
|
27,407 |
|
|
|
|
|
|
|
|
Income tax expense |
|
1,329 |
|
|
5,861 |
|
|
|
|
|
|
|
|
Net income |
$ |
9,103 |
|
$ |
21,546 |
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
Basic |
$ |
0.42 |
|
$ |
1.01 |
|
|
|
|
|
|
|
|
Diluted |
$ |
0.41 |
|
$ |
0.96 |
|
|
|
|
|
|
|
|
Weighted-average shares of common stock outstanding: |
|
|
|
|
|
|
Basic |
|
21,680 |
|
|
21,417 |
|
|
|
|
|
|
|
|
Diluted |
|
22,300 |
|
|
22,371 |
|
|
|
|
|
|
|
|
Contact:
Big 5 Sporting Goods CorporationBarry EmersonExecutive Vice
President and Chief Financial Officer(310) 536-0611
ICR, Inc.Jeff SonnekManaging Director(646) 277-1263
Big 5 Sporting Goods (NASDAQ:BGFV)
Historical Stock Chart
From Mar 2024 to Apr 2024
Big 5 Sporting Goods (NASDAQ:BGFV)
Historical Stock Chart
From Apr 2023 to Apr 2024