Big 5 Sporting Goods Corporation ( BGFV ) came up with
robust sales and comparable store sales results for the fourth
quarter of fiscal 2012 and fiscal 2012. Concurrently, the company
updated its earnings projections for the fourth quarter and fiscal
2012.BIG 5 SPORTING (BGFV): Free Stock Analysis
ReportDICKS SPRTG GDS (DKS): Free Stock Analysis
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Net sales for the fourth quarter jumped 7.5% year over year to
$243.6 million. Comps grew 6.5% compared to last year, marking the
highest quarterly increase in over 10 years. Comps growth in the
quarter was driven by a mid-single-digit rise in comps recorded in
October and November, as well as high-single-digit growth
registered in December.
Category-wise, the company recorded positive comps across all
categories, with hardgoods being the strongest. This was followed
by apparel and footwear. The company's merchandise margins improved
20 basis points from the year-ago quarter.
Additionally, Big 5 ended the fourth quarter with a strong balance
sheet. During the quarter, the company used its ample cash flows to
lower borrowings under its revolving credit facility to $47.5
million compared with $63.5 million at the end of fiscal
The company reported net sales of $940.5 million for fiscal 2012,
up 4.3% from $902.1 million in fiscal 2011. Comps for the year rose
2.5% compared to last year.
Simultaneously, Big 5 narrowed its earnings guidance range for the
fourth quarter and put forward its guidance for fiscal 2012. The
company now expects fourth quarter earnings per share in the range
of 17 cents - 19 cents, compared to the previously forecasted range
of 13 cents - 21 cents. The current Zacks Consensus Estimate for
the fourth quarter stands at 19 cents, which is at the higher end
of the company's guidance range.
For fiscal 2012, the company expects earnings per share in the 67
cents - 69 cents range, compared with 53 cents reported in fiscal
2011. The current Zacks Consensus Estimate for fiscal 2012 stands
at 70 cents, which is above the higher end of the company's
guidance range. The company is expected to release its fourth
quarter and fiscal 2012 earnings results by the end of
This leading sporting goods retailer in the western U.S. has a
unique strategy of offering exclusive branded merchandise sourced
from leading manufacturers that provide it with a competitive edge
over its rivals like Dick's Sporting Goods
Corporation ( DKS ). The company also
leverages its strong vendor relationships to source overstock and
closeout merchandise at substantial discounts, achieving dual
objectives of boosting gross margin while offering compelling value
to its customers.
Further, we believe Big 5 Sporting continues to progress well with
its growth initiatives, which include expanding its store base and
bringing in technological advancements to better serve its patrons.
The company leverages an extensive network of stores to effectively
penetrate into its target markets, which in turn, enables it to
generate healthy sales and gain market share. The company's fourth
quarter store plans include opening of 8 locations, thereby
bringing the total store count to 414 by the end of fiscal
The above mentioned positives have induced us to retain our
long-term Outperform recommendation on the stock. However, the
company currently has a Zacks Rank # 3 (Hold).