Big 5 Sporting Goods Corp. ( BGFV ) posted strong
first-quarter 2013 results with earnings marking a massive jump to
34 cents per share against a penny reported in the comparable
year-ago quarter. The year-over-year increase was primarily driven
by strong sales growth and improved margins.
Moreover, the quarterly earnings of this Zacks Rank #2 (Buy)
company surpassed its own guidance range of 18 - 24 cents per share
and the Zacks Consensus Estimate of 21 cents.
Quarter in Detail
Net sales for the quarter increased approximately 12.7% to
$246.3 million compared with $218.5 million in the first quarter of
2012 and surpassed the Zacks Consensus Estimate of $238.0 million.
Sales in the quarter mainly benefited from favorable weather
conditions, surge in demand for firearms and ammunition products
along with the company's ongoing merchandise and marketing
initiatives, partially offset by the negative impact from the shift
in Easter timings.
Same-store sales rose 10.5% over the year-ago quarter, ahead of
the high-single-digit increase the company had guided. Improvement
in same-store sales was primarily driven by increased customer
traffic and higher average sale.
Gross profit in the quarter increased 19.3% to $80.5 million,
while gross profit margin expanded 180 basis points (bps) to 32.7%
due to a 113 bps improvement in merchandise margins, and reduced
store occupancy and distribution expenses as a percentage of
Selling and administrative expense, as a percentage of net
sales, contracted 290 bps to 27.6%. However, in dollar terms,
selling and administrative expenses increased $1.3 million to $67.9
million. The escalation is primarily attributable to increased
store-related expenses due to higher store count and elevated
employee benefit-related costs, which were somewhat offset by
reduced advertising expenses.
Operating income for the quarter stood at $12.5 million against
$0.8 million reported in the first quarter of 2012. Consequently,
operating margin came in at 5.1% against 0.4% in the comparable
year-ago quarter. The year-over-year improvement in operating
margin was primarily driven by increased gross profit margin and
reduced selling and administrative expenses as a percentage of
Big 5 ended the quarter with cash and cash equivalents of $5.4
million. The company's inventory level at the end of the first
quarter was up 0.6% at $271.9 million compared with $270.4 million
at the end of fiscal 2012.
Long-term date as of Mar 31, 2013 stood at $31.9 million
compared with $47.5 million as of Dec 31, 2012. Shareholders'
equity at the end of the quarter stood at $170.4 million.
The company continues to enhance shareholder value by returning
cash in the form of dividends and share repurchases. Subsequent to
the earnings result, Big 5 declared a quarterly cash dividend of 10
cents per share, payable on Jun 14, 2013 to shareholders of record
as of May 31, 2013.
In the reported quarter, Big 5 inaugurated 1 store and closed 1,
bringing the store count at the end of quarter to 414 stores.
Looking ahead, Big 5 plans to open 2 new stores during the
second quarter of 2013. For full-year 2013, the company targets to
open nearly 15 to 20 new outlets.
In anticipation of favorable weather conditions, shift of the
Easter holiday and higher demand for firearms and ammunition
products, management expects same-store sales in the second quarter
of 2013 to increase in the mid-single-digit range. Further, the
company anticipates earnings for the quarter to range from 20 cents
- 26 cents per share. Currently, the Zacks Consensus Estimate
stands at 21 cents per share.
Other Stocks to Consider
Apart from Big 5, other stocks in the sporting goods retail
industry worth considering include Cabela's Inc. (
CAB ), Hot
Topic Inc. ( HOTT ) and
Buckle Inc. ( BKE ). Currently,
Cabela's holds a Zacks Rank #1 (Strong Buy) while Hot Topic and
Buckle carry a Zacks Rank #2 (Buy).BIG 5 SPORTING (BGFV): Free Stock Analysis
ReportBUCKLE INC (BKE): Free Stock Analysis ReportCABELAS INC (CAB): Free Stock Analysis ReportHOT TOPIC INC (HOTT): Free Stock Analysis
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