Every analyst covering
Big 5 Sporting Goods Corp.
) has raised earnings estimates in the past 30 days, following
back-to-back quarters with positive surprises for this sporting
goods retailer. Shares have been gaining since mid-June as well.
This Zacks #2 Rank (Strong Buy) looks to be an attractive pick
given its encouraging forward guidance, store expansion plan,
strong estimate revisions and robust long-term earnings growth
projection of 11.3%.
Solid Q3 Results
On November 1, Big 5 Sporting Goods Corp. posted third-quarter
earnings per share of 39 cents, surpassing the Zacks Consensus
Estimate by 21.9%.
Net sales of $251.8 million rose 7.3% from the prior-year quarter
and also beat the Zacks Consensus Estimate of $247 million. Sales
mainly benefited from the calendar shift of the 4th July holiday
into the third quarter, as well as the company's ongoing
merchandise and marketing initiatives.
Same-store sales increased 5.0% over the prior-year quarter, driven
by improvement across all geographies and the major product
categories of apparel, footwear and hard goods.
Gross profit increased 9% to $83.9 million, while gross profit
margin expanded 50 basis points to 33.3%. Selling and
administrative expenses grew 4.3% to $70.4 million driven by an
increase in store related expenses. Consequently, operating income
advanced 42.1% to $13.5 million, while operating margin expanded
140 basis points to 5.4%.
Management expects earnings per share in the fourth quarter to
range from 13 cents to 21 cents per share, with same store sales in
the mid-single digits. For fiscal 2012, the company plans to open
nearly 14 new stores, of which three will be relocations.. At
year-end, the company's total store count is expected to reach 414.
Earnings Momentum on the Rise
The Zacks Consensus Estimate for fiscal 2012 rose 14.8% to 70 cents
per share in the past 30 days, as all 5 estimates were revised
upwards. This represents a year-over-year increase of 52.2%. The
Zacks Consensus Estimate for fiscal 2013 grew 11.5% to 87 cents
over the same time frame as all 6 estimates were raised, reflecting
a year-over-year increase of 24.3%.
The chart below indicates steady growth in the company's share
price since mid-June, reflecting an upside of about 123.9%.
Furthermore, shares have gained 38.6% year-to-date.
Shares of Big 5 Sporting Goods have consistently traded above its
200-day moving average since August 27, 2012. Barring a few
occasions, the stock has also remained above the 50-day moving
average since June 25, 2012. Moreover, the company has outperformed
the S&P 500 Index. Volume is fairly strong, averaging roughly
Based in El Segundo, California, Big 5 Sporting Goods Corp.
operates as a sporting goods retailer in the western U.S. The
company offers athletic shoes, apparel, accessories and a broad
selection of outdoor and athletic equipment for team sports,
fitness, camping, hunting, fishing, tennis, golf, snowboarding, and
in-line skating. Big 5 stores have nationally recognized brands,
such as Nike, Reebok, Adidas, New Balance, Coleman, Rollerblade,
Spalding and Wilson. The company also offers private label
merchandise manufactured exclusively for its stores. Founded in
1955, the company currently operates 407 stores across 12 states in
the U.S. The company has a current market cap of $295 million.
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