- First Quarter Earnings per Diluted Share Increase 77% to $0.23 Compared to Prior Year Earnings per Diluted Share of $0.13
- Same Store Sales Increase 2.4% from Comparable Period Last Year
- Declares Quarterly Cash Dividend of $0.05 per Share
EL SEGUNDO, Calif., May 6, 2010 /PRNewswire via COMTEX/ --Big 5 Sporting Goods Corporation (Nasdaq: BGFV), a leading sporting goods retailer, today reported financial results for the first quarter ended April 4, 2010.
For the fiscal 2010 first quarter, net sales increased to $218.5 million from net sales of $210.3 million for the first quarter of fiscal 2009. Same store sales increased 2.4% versus the comparable period last year, representing the Company's fourth consecutive quarterly increase in same store sales. As anticipated, first quarter sales were negatively affected by a shift in the timing of the Easter holiday, during which the Company's stores are closed, into the first quarter from the second quarter last year.
Gross profit for the fiscal 2010 first quarter increased to $71.6 million from $67.1 million in the first quarter of the prior year. The Company's gross profit margin improved to 32.7% in the fiscal 2010 first quarter versus 31.9% in the first quarter of the prior year. The increase in gross profit margin was driven primarily by an increase in merchandise margins of approximately 15 basis points and increased sales leverage on distribution and store occupancy costs.
Selling and administrative expense as a percentage of net sales decreased to 28.8% in the fiscal 2010 first quarter versus 29.4% in the first quarter of the prior year. The Company leveraged selling and administrative costs through higher sales. Overall selling and administrative expense increased $1.2 million during the quarter from the same period last year due mainly to the increase in store count.
Net income for the first quarter of fiscal 2010 improved to $5.0 million, or $0.23 per diluted share, from net income of $2.8 million, or $0.13 per diluted share, for the first quarter of fiscal 2009.
"We are pleased to have significantly improved both our top and bottom lines during the first quarter of fiscal 2010," said Steven G. Miller, the Company's Chairman, President and Chief Executive Officer. "We achieved earnings per share at the high end of our guidance range for the quarter, driven by growth in customer traffic and average sale and expansion of merchandise and operating margins. Our same store sales growth of 2.4% represented our strongest quarterly same store growth since the fourth quarter of 2006, as favorable winter weather conditions in many of our markets led to sales increases across our three major merchandise categories of apparel, footwear and hardgoods. Additionally, our strong cash flow enabled us to continue to reduce debt levels, and we ended the quarter with $46 million in debt compared to $55 million at the end of 2009 and $77 million at the end of the first quarter of 2009."
Mr. Miller continued, "We believe we are well positioned to grow same store sales again during the second quarter of fiscal 2010. While the economic environment in our markets remains challenging, we remain confident in our overall strategy and believe our focus on providing compelling values to our customers will continue to serve our business well."
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 15, 2010 to stockholders of record as of June 1, 2010.
Guidance
For the fiscal 2010 second quarter, the Company expects same store sales in the positive low single-digit range and earnings per diluted share in the range of $0.24 to $0.30. For comparative purposes, the Company's earnings per diluted share for the second quarter of fiscal 2009 were $0.22.
Store Openings
During the first quarter, the Company opened two new stores and relocated one store. The Company ended the fiscal 2010 first quarter with 386 stores, and anticipates opening between 10 and 15 new stores, net of relocations, during fiscal 2010.
Conference Call Information
The Company will host a conference call and audio webcast today, May 6, 2010, at 2:00 p.m. Pacific (5:00 p.m. EDT) to discuss financial results for the fiscal 2010 first quarter. To access the conference call, participants in North America should dial (888) 503-8162, and international participants should dial (719) 325-2171. 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. 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 20, 2010 by calling (888) 203-1112; passcode is 4409849.
About Big 5 Sporting Goods Corporation
Big 5 is a leading sporting goods retailer in the western United States, operating 386 stores in 12 states under the "Big 5 Sporting Goods" name. 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, snowboarding and in-line skating.
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. Those risks and uncertainties include, among other things, continued or worsening weakness in the consumer spending environment and the U.S. financial and credit markets, the competitive environment in the sporting goods industry in general and in Big 5's specific market areas, inflation, product availability and growth opportunities, seasonal fluctuations, weather conditions, changes in cost of goods, operating expense fluctuations, disruption in product flow, changes in interest rates, credit availability and Big 5's ability to refinance its current financing agreement on favorable terms or at all, and higher costs associated with current and new 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 Report on Form 10-K/A for the fiscal year ended January 3, 2010. 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)
April 4, January 3,
2010 2010
---- ----
ASSETS
Current assets:
Cash and cash equivalents $5,313 $5,765
Accounts receivable, net of
allowances of $136 and $223,
respectively 7,742 13,398
Merchandise inventories, net 240,100 230,911
Prepaid expenses 9,153 9,683
Deferred income taxes 7,475 7,723
----- -----
Total current assets 269,783 267,480
------- -------
Property and equipment, net 80,171 81,817
Deferred income taxes 12,363 11,327
Other assets, net of accumulated
amortization of $359 and $346,
respectively 1,026 1,065
Goodwill 4,433 4,433
----- -----
Total assets $367,776 $366,122
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $98,307 $85,721
Accrued expenses 53,115 59,314
Current portion of capital lease
obligations 1,900 1,904
Short-term revolving credit
borrowings 45,504 -
------ ---
Total current liabilities 198,826 146,939
------- -------
Deferred rent, less current
portion 23,913 23,832
Capital lease obligations, less
current portion 2,005 2,278
Long-term revolving credit
borrowings - 54,955
Other long-term liabilities 6,612 6,257
----- -----
Total liabilities 231,356 234,261
------- -------
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par value,
authorized 50,000,000 shares;
issued 23,223,857 and 23,050,061
shares, respectively;
outstanding 21,740,562 and
21,566,766 shares, respectively 232 230
Additional paid-in capital 95,863 95,259
Retained earnings 61,691 57,738
Less: Treasury stock, at cost;
1,483,295 shares (21,366) (21,366)
------- -------
Total stockholders' equity 136,420 131,861
------- -------
Total liabilities and
stockholders' equity $367,776 $366,122
BIG 5 SPORTING GOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
13 Weeks Ended
--------------
April
4, March 29,
2010 2009
---- ---
Net sales $218,521 $210,291
Cost of sales 146,971 143,219
------- -------
Gross profit 71,550 67,072
Selling and administrative expense 63,063 61,838
------ ------
Operating income 8,487 5,234
Interest expense 404 713
--- ---
Income before income taxes 8,083 4,521
Income taxes 3,050 1,761
----- -----
Net income $5,033 $2,760
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Earnings per share :
Basic $0.23 $0.13
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Diluted $0.23 $0.13
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Dividends per share $0.05 $0.05
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Weighted-average shares of common stock
outstanding:
Basic 21,484 21,414
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Diluted 21,843 21,424
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SOURCE Big 5 Sporting Goods Corporation