-- Declares Quarterly Cash Dividend of $0.075 per Share
EL SEGUNDO, Calif., May 3, 2011 (GLOBE NEWSWIRE) -- Big 5 Sporting Goods Corporation (Nasdaq:BGFV), a leading sporting goods retailer, today reported financial results for the fiscal 2011 first quarter ended April 3, 2011.
For the fiscal 2011 first quarter, net sales were $221.1 million, compared to net sales of $218.5 million for the first quarter of fiscal 2010. Same store sales decreased 0.9% for the first quarter of 2011 versus the comparable period in the prior year. This compares to a same store sales increase of 2.4% in the first quarter of 2010. Sales results in fiscal 2011 reflect a benefit over the prior year from the calendar shift of the Easter holiday, during which the Company's stores are closed, out of the first quarter and into the second quarter this year.
Gross profit for the fiscal 2011 first quarter was $72.2 million, compared to $71.6 million in the first quarter of the prior year. The Company's gross profit margin was 32.6% in the fiscal 2011 first quarter versus 32.7% in the first quarter of the prior year. The slight gross profit margin decrease reflects an increase in store occupancy costs related to new store openings, partially offset by an increase in merchandise margins of 12 basis points.
Selling and administrative expense as a percentage of net sales was 30.4% in the fiscal 2011 first quarter versus 28.8% in the first quarter of the prior year. Overall selling and administrative expense increased $4.2 million during the quarter from the prior year due mainly to an increase in store-related expenses, which reflected a higher store count and increased employee benefit costs, as well as increased advertising expense.
Net income for the first quarter of fiscal 2011 was $2.8 million, or $0.13 per diluted share, compared to net income of $5.0 million, or $0.23 per diluted share, for the first quarter of fiscal 2010.
"Our sales results for the first quarter were at the lower end of our guidance range and reflect continued macroeconomic weakness in our markets," said Steven G. Miller, the Company's Chairman, President and Chief Executive Officer. "Sales were negatively impacted by a decrease in customer traffic, as we believe many of our consumers reduced purchases of discretionary items in response to the challenging economic environment, characterized by rising gas prices and high unemployment. Earnings were lower than our previous expectations primarily due to higher than anticipated expenses associated with employee benefits, including workers' compensation, health and welfare and California unemployment taxes."
Mr. Miller continued, "Sales trends in the second quarter to-date remain challenging as we believe that our consumer continues to be highly sensitive to the adverse economic conditions prevalent in our markets, which are concentrated in the western United States. We continue to look at all aspects of our business in order to drive sales and earnings. We are taking steps to further enhance our merchandise, pricing, and promotional strategies, while remaining focused on operating as efficiently as possible. We believe that our continued emphasis on improving the execution of our overall business model will enable us to weather the current environment and position us well when the consumer climate improves."
Quarterly Cash Dividend
The Company's Board of Directors has declared a quarterly cash dividend of $0.075 per share of outstanding common stock, which will be paid on June 15, 2011 to stockholders of record as of June 1, 2011.
Guidance
For the fiscal 2011 second quarter, the Company expects same store sales in the flat to negative low single-digit range and earnings per diluted share in the range of $0.06 to $0.14. For comparative purposes, the Company's earnings per diluted share for the second quarter of fiscal 2010 were $0.22.
Store Openings
During the first quarter of fiscal 2011, the Company opened two new stores, both of which were relocations, and closed two stores as part of relocations that began in late 2010. The Company ended the fiscal 2011 first quarter with 396 stores and anticipates closing one store during the fiscal 2011 second quarter as part of a relocation that began in late 2010. Excluding stores closed as part of relocations that began last year, the Company currently expects to open between 10 and 15 net new stores during fiscal 2011.
Conference Call Information
The Company will host a conference call and audio webcast today, May 3, 2011, at 2:00 p.m. Pacific (5:00 p.m. EDT) to discuss financial results for the fiscal 2011 first quarter. To access the conference call, participants in North America should dial (888) 634-9984, and international participants should dial (719) 325-2138. 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. Visitors to the website should select the "Investor Relations" link to access the webcast. 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 17, 2011 by calling (877) 870-5176; passcode is 9019902.
About Big 5 Sporting Goods Corporation
Big 5 is a leading sporting goods retailer in the western United States, operating 396 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 roller sports.
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, litigation risks, disruption in product flow, changes in interest rates, credit availability, and higher costs associated with 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 for the fiscal year ended January 2, 2011. 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.
BIG 5 SPORTING GOODS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share amounts)
January
April 3, 2,
2011 2011
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 6,500 $ 5,620
Accounts receivable, net of
allowances of $105 and $201,
respectively 11,903 15,000
Merchandise inventories, net 255,525 254,217
Prepaid expenses 7,400 7,588
Deferred income taxes 8,958 9,447
--------- ---------
Total current assets 290,286 291,872
--------- ---------
Property and equipment, net 78,026 81,333
Deferred income taxes 12,959 12,396
Other assets, net of accumulated
amortization of $151 and $69,
respectively 2,247 2,322
Goodwill 4,433 4,433
--------- ---------
Total assets $ 387,951 $ 392,356
========= =========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 95,148 $ 94,818
Accrued expenses 55,342 64,392
Current portion of capital
lease obligations 1,697 1,925
--------- ---------
Total current liabilities 152,187 161,135
--------- ---------
Deferred rent, less current
portion 23,489 24,349
Capital lease obligations, less
current portion 1,374 1,569
Long-term debt 51,808 48,313
Other long-term liabilities 6,883 6,264
--------- ---------
Total liabilities 235,741 241,630
--------- ---------
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par value,
authorized 50,000,000 shares;
issued 23,466,120 and
23,315,832 shares,
respectively; outstanding
21,982,825 and 21,832,537
shares, respectively 235 233
Additional paid-in capital 98,270 97,910
Retained earnings 75,071 73,949
Less: Treasury stock, at cost;
1,483,295 shares (21,366) (21,366)
--------- ---------
Total stockholders' equity 152,210 150,726
--------- ---------
Total liabilities and
stockholders' equity $ 387,951 $ 392,356
========= =========
BIG 5 SPORTING GOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(In thousands, except per share data)
13 Weeks Ended
----------------------
April 3, April 4,
2011 2010
---------- ----------
Net sales $ 221,143 $ 218,521
Cost of sales 148,960 146,971
---------- ----------
Gross profit 72,183 71,550
Selling and
administrative
expense 67,262 63,063
---------- ----------
Operating income 4,921 8,487
Interest expense 605 404
---------- ----------
Income before
income taxes 4,316 8,083
Income taxes 1,556 3,050
---------- ----------
Net income $ 2,760 $ 5,033
========== ==========
Earnings per share:
Basic $ 0.13 $ 0.23
========== ==========
Diluted $ 0.13 $ 0.23
========== ==========
Dividends per share $ 0.075 $ 0.05
========== ==========
Weighted-average
shares of common
stock outstanding:
Basic 21,619 21,484
========== ==========
Diluted 21,946 21,843
========== ==========
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Big 5 Sporting Goods Corporation
CONTACT: Big 5 Sporting Goods Corporation Barry Emerson Sr. Vice President and Chief Financial Officer (310) 536-0611 ICR, Inc. John Mills Senior Managing Director (310) 954-1105