Big 5 Sporting Goods Corporation Announces Fiscal 2019 Fourth Quarter and Full Year Sales Results and Update of Earnings Guid...
January 13 2020 - 4:01PM
Big 5 Sporting Goods Corporation (Nasdaq: BGFV) (the “Company”), a
leading sporting goods retailer, today reported sales results for
the fiscal 2019 fourth quarter and full year ended December 29,
2019.
For the fiscal 2019 full year, net sales
increased to $996.5 million from $987.6 million in fiscal
2018. Same store sales increased 1.2% for the fiscal 2019
full year. The Company’s merchandise margins increased
approximately 66 basis points for the fiscal 2019 full year
compared to fiscal 2018.
For the fiscal 2019 fourth quarter, net sales
were $244.1 million compared to net sales of $247.1 million for the
fourth quarter of fiscal 2018. Same store sales decreased
0.6% for the fourth quarter of fiscal 2019. The Company’s
merchandise margins increased by approximately 239 basis points for
the fourth quarter of fiscal 2019 compared to the fourth quarter of
fiscal 2018.
During the fiscal 2019 fourth quarter, on a same
store basis, sales in the Company’s apparel category increased in
the mid-single-digit range on the strength of demand for seasonal
winter products, sales in its footwear category increased in the
positive low-single-digit range, and sales in its hardgoods
category decreased in the mid-single-digit range, largely due to
softness in firearms-related products. The Company’s average
sale increased in the low-single-digit range and customer
transactions decreased in the low-single-digit range for the fourth
quarter of fiscal 2019 compared to the fourth quarter of fiscal
2018.
For the fiscal 2019 fourth quarter, the Company
now expects to generate earnings per diluted share in the range of
$0.02 to $0.04, which compares to the Company’s previous guidance
for the fourth quarter of a loss per share in the range of $0.04 to
$0.16. For the fiscal 2019 full year, the Company now expects
to generate earnings per diluted share in the range of $0.40 to
$0.42, including a net benefit of $0.01 per diluted share related
to the favorable settlement of a software contract termination in
the second quarter which was partially offset by a charge for the
write-off of deferred tax assets related to share-based
compensation in the first quarter. For purposes of comparison
to the prior year, for the fiscal 2018 fourth quarter the Company
realized a loss of $0.24 per share, which included $0.08 per share
of charges as previously reported, and for the fiscal 2018 full
year the Company realized a loss of $0.17 per share, which included
$0.09 per share of charges as previously reported. Earnings
guidance for the fiscal 2019 fourth quarter and full year is
unaudited and excludes any charges to be determined related to
potential asset impairment.
Fiscal year-end debt levels totaled $66.6
million as of December 29, 2019, compared to $65.0 million at the
end of fiscal 2018. Total merchandise inventories increased
approximately 5.4% for fiscal 2019 year-end versus the prior year,
in part reflecting strategic inventory investments ahead of
anticipated cost increases.
“With our strong fourth quarter performance, we
are pleased to provide updated earnings guidance reflecting
significant earnings growth over the full year, as well as
quarterly earnings exceeding the top end of our prior guidance
range,” said Steven G. Miller, the Company’s Chairman, President
and Chief Executive Officer. “Although our same store sales
were slightly down for the quarter, our strategic decisions
regarding pricing and promotions over the holiday period
contributed to extraordinary expansion of merchandise margins,
which drove a 4.7% increase in same store gross margin
dollars. Additionally, our updated guidance reflects our
team’s ongoing focus on actively managing expenses as well as a
favorable benefit from distribution costs capitalized into
inventory. We are pleased that our merchandise margin
expansion and sound expense management have positioned our business
for substantial year-over-year earnings growth.”
The Company expects to issue earnings results
for the fiscal 2019 fourth quarter and full year by the end of
February 2020.
About Big 5 Sporting Goods
Corporation Big 5 is a leading sporting goods
retailer in the western United States, operating 434 stores under
the “Big 5 Sporting Goods” name as of the fiscal quarter ended
December 29, 2019. 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, tennis, golf, winter and summer recreation and
roller sports.
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, 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, 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, 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
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.
Contact:Big 5 Sporting Goods CorporationBarry EmersonSr. Vice
President and Chief Financial Officer(310) 536-0611
ICR, Inc.John MillsManaging Partner(646) 277-1254
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