Big 5 Holiday Sales Up, Outlook Revised - Analyst Blog


Big 5 Sporting Goods Corp. ( BGFV ) announced favorable sales results for the fourth quarter and full-year 2013. The company also revised its earnings outlook for the same period.

Net sales for the quarter rose 1.8% to $248.0 million from $243.6 million last year. However, comparable store sales (comps) slipped 0.5% compared to the prior-year quarter and also came below the previous guidance of lower single-digit growth. Last year, the company posted a 6.5% increase in comps for the fourth quarter.

In the apparel segment comps rose in the lower double-digit range but showed a marginal improvement in the footwear segment. Also, sales in the hardgoods segment declined in the mid-single digits due to soft demand for firearm and ammunition products, which was the main driver of comps in the last quarter. Comps also decreased owing to unfavorable weather condition in the Western market zone.

However, the company's merchandise margins for the quarter expanded by 47 basis points (bps). Big 5's continued focus on improvising product margins and effective cost management have been quite impressive, enabling the company to deliver healthy results.

Big 5 reported net sales of $993.3 million for fiscal 2013, which rose 5.6% from $940.5 million year over year. Further, comps for the year increased 3.9%.

Given the sales results, the athletic goods retailer revised its earnings outlook. The company now envisions earnings in the band of 21-23 cents per share in its fourth quarter, which is narrower than the previous guidance of 20-28 cents per share. The Zacks Consensus Estimate for the quarter currently stands at 25 cents a share, slightly above the company's current prediction.

For fiscal 2013, Big 5 anticipates earnings to range from $1.24-$1.26 a share, below the Zacks Consensus Estimate of $1.32 per share.

Though the holiday season has been a tough one for many retailers because of the competitive promotional environment, Big 5 faced the challenges well and is favorably positioned to deliver another sturdy quarter, backed by healthy product margins and cost containment efforts. Currently, this California-based company holds a Zacks Rank #2 (Buy).

Although some retailers made their way out through the tough season, others struggled to lure budget-constrained consumers and trimmed their forecast due to lower-than-expected sales and margin pressure. Retailers that lowered their guidance battered by the holiday results include Family Dollar Stores Inc. ( FDO ), American Eagle Outfitters Inc. ( AEO ) and L Brands Inc. ( LB ).

AMER EAGLE OUTF (AEO): Free Stock Analysis Report

BIG 5 SPORTING (BGFV): Free Stock Analysis Report

FAMILY DOLLAR (FDO): Free Stock Analysis Report

L BRANDS INC (LB): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: AEO , BGFV , FDO , LB

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