Big 5 Sporting Goods Corporation (Nasdaq: BGFV) (the “Company”), a
leading sporting goods retailer, today reported financial results
for the fiscal 2019 first quarter ended March 31, 2019.
Net sales for the fiscal 2019 first quarter
increased to $245.3 million compared to net sales of $234.2 million
for the first quarter of fiscal 2018. Same store sales
increased 4.6% for the first quarter of fiscal 2019. Net and
same store sales comparisons year-over-year reflect a small
positive impact as a result of the calendar shift of the Easter
holiday, when the Company’s stores are closed, into the second
quarter of fiscal 2019 from the first quarter of fiscal 2018.
Gross profit for the fiscal 2019 first quarter
increased to $75.9 million from $72.7 million in the first quarter
of the prior year. The Company’s gross profit margin was
30.9% in the fiscal 2019 first quarter versus 31.1% in the first
quarter of the prior year. Merchandise margins increased one
basis point for the quarter compared to the prior year
period. The decrease in gross profit margin largely reflects
lower distribution costs capitalized into inventory as a result of
reduced inventory levels, which was offset by reduced occupancy and
warehouse expense as a percentage of net sales.
Selling and administrative expense as a
percentage of net sales decreased to 29.6% in the fiscal 2019 first
quarter from 31.4% in the first quarter of the prior year.
Overall selling and administrative expense for the quarter
decreased $0.9 million from the prior year primarily due to lower
print advertising and employee benefit-related expenses, partially
offset by higher store labor expense reflecting minimum wage
increases as well as higher payment card transaction fees
associated with the higher sales volume versus the prior year.
Net income for the first quarter of fiscal 2019
was $1.7 million, or $0.08 per diluted share, including a charge of
$0.02 per diluted share for the write-off of deferred tax assets
related to share-based compensation. For the first quarter of
fiscal 2018, net loss was $1.3 million, or $0.06 per share,
including a $0.01 per share charge for the write-off of deferred
tax assets.
The Company’s revolving credit borrowings were
$45.4 million as of the end of the fiscal 2019 first quarter, which
reflects a reduction of $23.5 million versus the same period in the
prior year and a reduction of $19.6 million compared to the end of
the prior fiscal year. The Company’s merchandise inventories
declined 7.7% on a per-store basis as of the end of the first
quarter compared to the prior year period. The resulting
working capital improvements in inventory and accounts payable, as
well as higher net income, drove a $21.4 million increase in
operating cash flow in the fiscal 2019 first quarter to $12.5
million, compared to an $8.9 million use of cash in the first
quarter of fiscal 2018.
“Our strong first quarter sales resulted in
solid earnings growth and allowed us to substantially strengthen
our balance sheet by reducing both inventory and borrowing
levels. Our model, which is built on providing the optimal
mix of value, selection, service and convenience, enabled us to
capitalize on favorable seasonal winter conditions and achieve a
remarkable sell-down of our winter merchandise,” said Steven G.
Miller, the Company’s Chairman, President and Chief Executive
Officer. “While our current sales trends are somewhat
difficult to read due to the volatility of this year’s weather and
the later timing of Easter this year, it appears that our business
is being impacted by softness in our overall consumer
environment. That said, we feel well-positioned from a
merchandise and promotional perspective for the key selling period
during the quarter, which includes Memorial Day, Father’s Day and
the start of the summer season. Given that weather was
generally unfavorable last year during these periods, we believe
that there exists upside opportunity over the balance of the
quarter.”
Quarterly Cash Dividend The
Company's Board of Directors has declared a quarterly cash dividend
of $0.05 per share of outstanding common stock, which will be paid
on June 14, 2019 to stockholders of record as of May 31, 2019.
Guidance For the fiscal
2019 second quarter, the Company expects same store sales to be in
the low negative to low positive single-digit range and loss per
share to be in the range of $0.04 to $0.12. This compares to
a same store sales decrease of 2.1% and a loss per share of $0.01
in the second quarter of fiscal 2018. Fiscal 2019 second
quarter guidance reflects the combined negative impact of calendar
shifts associated with the Easter holiday, during which the
Company’s stores are closed, from the first quarter of fiscal 2018
and into the second quarter of fiscal 2019, and with the Fourth of
July holiday, which will move one day further into the third
quarter this year.
Store OpeningsDuring the first
quarter of fiscal 2019, the Company closed three stores, ending
with 433 stores in operation. During the fiscal 2019 second
quarter, the Company expects to open one new store. For the
fiscal 2019 full year, the Company continues to anticipate opening
approximately five new stores and closing approximately four
stores.
Conference Call InformationThe
Company will host a conference call and audio webcast today, April
30, 2019, at 2:00 p.m. Pacific (5:00 p.m. ET), to discuss financial
results for the first quarter of fiscal 2019. To access the
conference call, participants in North America should dial (888)
208-1711 and international participants may dial (323)
994-2082. 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 telephone
replay will be available through May 7, 2019 by calling (844)
512-2921 to access the playback; the passcode is 8369872.
About Big 5 Sporting Goods
Corporation Big 5 is a leading sporting goods
retailer in the western United States, operating 433 stores under
the “Big 5 Sporting Goods” name as of the fiscal quarter ended
March 31, 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.
FINANCIAL TABLES FOLLOW
BIG 5 SPORTING GOODS CORPORATION |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(Unaudited) |
(In thousands, except share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2019 |
|
December 30, 2018 |
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
Cash |
$ |
5,299 |
|
$ |
6,765 |
|
Accounts receivable, net of
allowances of $41 and $28, respectively |
|
10,743 |
|
|
14,184 |
|
Merchandise inventories, net |
|
296,239 |
|
|
294,900 |
|
Prepaid expenses |
|
7,168 |
|
|
9,224 |
|
Total current assets |
|
319,449 |
|
|
325,073 |
|
|
|
|
|
|
Operating lease right-of-use assets, net |
|
254,605 |
|
|
— |
|
Property and equipment, net |
|
73,566 |
|
|
76,488 |
|
Deferred income taxes |
|
14,041 |
|
|
14,543 |
|
Other assets, net of accumulated amortization of
$1,837 and $1,772, respectively |
|
3,347 |
|
|
3,457 |
|
Total assets |
$ |
665,008 |
|
$ |
419,561 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
$ |
103,273 |
|
$ |
80,613 |
|
Accrued expenses |
|
58,288 |
|
|
67,659 |
|
Current portion of operating lease
liabilities |
|
60,708 |
|
|
— |
|
Current portion of finance lease
liabilities |
|
2,228 |
|
|
2,322 |
|
Total current liabilities |
|
224,497 |
|
|
150,594 |
|
|
|
|
|
|
Operating lease
liabilities, less current portion |
|
205,491 |
|
|
— |
|
Finance lease
liabilities, less current portion |
|
4,941 |
|
|
4,823 |
|
Long-term debt |
|
45,411 |
|
|
65,000 |
|
Deferred rent, less
current portion |
|
— |
|
|
14,615 |
|
Other long-term
liabilities |
|
9,233 |
|
|
9,668 |
|
Total liabilities |
|
489,573 |
|
|
244,700 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
Common stock, $0.01 par value,
authorized 50,000,000 shares; issued 25,274,685 and |
|
|
|
|
25,074,307 shares,
respectively; outstanding 21,624,472 and 21,424,094 shares,
respectively |
252 |
|
|
250 |
|
Additional paid-in capital |
|
118,666 |
|
|
118,351 |
|
Retained earnings (1) |
|
99,044 |
|
|
98,787 |
|
Less: Treasury stock, at cost;
3,650,213 and 3,650,213 shares, respectively |
|
(42,527 |
) |
|
(42,527 |
) |
Total
stockholders' equity |
|
175,435 |
|
|
174,861 |
|
Total
liabilities and stockholders' equity |
$ |
665,008 |
|
$ |
419,561 |
|
|
|
|
|
|
(1) In the first quarter of fiscal 2019, the Company recorded an
after-tax decrease to beginning retained earnings of $0.3 million
for a change in accounting principle related to leases.
|
|
BIG 5 SPORTING GOODS CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
(In thousands, except per share data) |
|
|
|
|
|
|
|
13 Weeks Ended |
|
|
March 31, 2019 |
|
April 1, 2018 |
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
245,286 |
$ |
234,178 |
|
|
|
|
|
|
Cost of sales |
|
169,410 |
|
161,452 |
|
|
|
|
|
|
Gross
profit |
|
75,876 |
|
72,726 |
|
|
|
|
|
|
Selling and
administrative expense |
|
72,611 |
|
73,488 |
|
|
|
|
|
|
Operating
income (loss) |
|
3,265 |
|
(762 |
) |
|
|
|
|
|
|
Interest expense |
|
776 |
|
656 |
|
|
|
|
|
|
|
Income
(loss) before income taxes |
|
2,489 |
|
(1,418 |
) |
|
|
|
|
|
|
Income tax expense
(benefit) (1) |
|
825 |
|
(109 |
) |
|
|
|
|
|
|
Net
income (loss) (1) |
$ |
1,664 |
$ |
(1,309 |
) |
|
|
|
|
|
|
Earnings (loss) per
share: |
|
|
|
|
|
Basic
(1) |
$ |
0.08 |
$ |
(0.06 |
) |
|
|
|
|
|
|
Diluted
(1) |
$ |
0.08 |
$ |
(0.06 |
) |
|
|
|
|
|
|
Dividends per
share |
$ |
0.05 |
$ |
0.15 |
|
|
|
|
|
|
Weighted-average shares
of common stock outstanding: |
|
|
|
|
Basic |
|
21,029 |
|
20,942 |
|
|
|
|
|
|
Diluted |
|
21,054 |
|
20,942 |
|
|
|
|
|
|
(1) In the first quarter of fiscal 2019 and 2018, the Company
recorded a charge of $0.3 million, or $0.02 per diluted share, and
$0.2 million, or $0.01 per share, respectively, to write-off
deferred tax assets related to share-based compensation.
Contact: Big 5 Sporting Goods CorporationBarry EmersonSr.
Vice President and Chief Financial Officer(310) 536-0611
ICR, Inc.John MillsManaging Partner(646) 277-1254
Big 5 Sporting Goods (NASDAQ:BGFV)
Historical Stock Chart
From Feb 2024 to Mar 2024
Big 5 Sporting Goods (NASDAQ:BGFV)
Historical Stock Chart
From Mar 2023 to Mar 2024