- Improved Fourth Quarter Earnings per Diluted Share by 75% from the Prior Year to
$0.35 , Including a Tax Benefit of$0.02 - Grew Fiscal 2016 Full-Year Earnings per Diluted Share by 10% Year Over Year to
$0.77 , Including Charges of$0.05 - Issues First Quarter Fiscal 2017 Earnings Guidance of
$0.12 to $0.18 per Diluted Share Compared to a Loss of$(0.05) per Share in the Prior Year - Declares Quarterly Cash Dividend of
$0.15 per Share
As the Company previously reported, net sales for the fiscal 2016 fourth quarter were
As a result of the fiscal year calendar, the fiscal 2016 fourth quarter included 13 weeks and the fiscal 2016 full year included 52 weeks, compared to 14 weeks and 53 weeks for the respective reporting periods in fiscal 2015. For purposes of reporting same store sales comparisons to fiscal 2015, the Company uses comparable 13-week and 52-week periods.
Gross profit for the fiscal 2016 fourth quarter was
Selling and administrative expense as a percentage of net sales was 28.2% in the fiscal 2016 fourth quarter versus 28.5% in the fourth quarter of the prior year. Overall selling and administrative expense for the quarter decreased
Net income for the fourth quarter of fiscal 2016 was
For the 52-week fiscal 2016 full year, net sales were
“We are pleased to report a strong finish to fiscal 2016, with solid same store sales, expanded gross margins, expense leverage and meaningful earnings growth in a challenging holiday sales environment,” said
Mr. Miller added, “For the first quarter to date, our same store sales are up in the mid-single-digit range, largely driven by strong demand for winter products as a result of very favorable winter weather conditions throughout most of our Western markets. We also continue to benefit from the competitive store closures, both from a sales and margin standpoint. We believe we are well positioned with our merchandise assortment for the spring selling season as we remain focused on providing our customers with the optimal mix of value, selection, service and convenience.”
Quarterly Cash Dividend
The Company's Board of Directors has declared a quarterly cash dividend of
Guidance
For the fiscal 2017 first quarter, the Company expects same store sales to be in the positive mid-single-digit range and earnings per diluted share to be in the range of
Store Openings
During the fourth quarter of fiscal 2016, the Company opened one new store and closed one store, ending fiscal 2016 with 432 stores in operation. During the fiscal 2017 first quarter, the Company relocated one store and will close one store. For the fiscal 2017 full year, the Company currently anticipates opening approximately eight new stores and closing approximately three stores.
Conference Call Information
The Company will host a conference call and audio webcast today,
About
Big 5 is a leading sporting goods retailer in the western
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, fluctuations in consumer holiday spending patterns, breach of data security or other unauthorized disclosure of sensitive personal or confidential information, the competitive environment in the sporting goods industry in general and in Big 5’s specific market areas, inflation, product availability and growth opportunities, changes in the current market for (or regulation of) firearm-related products, seasonal fluctuations, weather conditions, changes in cost of goods, operating expense fluctuations, changes in laws or regulations, including those related to tariffs and duties, lower than expected profitability of Big 5’s e-commerce platform or cannibalization of sales from Big 5’s existing store base which could occur as a result of operating the e-commerce platform, litigation risks, stockholder campaigns and proxy contests, disruption in product flow, changes in interest rates, credit availability, higher expense 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
FINANCIAL TABLES FOLLOW
| BIG 5 SPORTING GOODS CORPORATION | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (Unaudited) | ||||||||
| (In thousands, except share amounts) | ||||||||
| January 1, 2017 |
January 3, 2016 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 7,895 | $ | 7,119 | ||||
| Accounts receivable, net of allowances of $42 and $61, respectively | 12,200 | 14,180 | ||||||
| Merchandise inventories, net | 294,319 | 299,446 | ||||||
| Prepaid expenses | 10,085 | 12,185 | ||||||
| Total current assets | 324,499 | 332,930 | ||||||
| Property and equipment, net | 78,420 | 82,036 | ||||||
| Deferred income taxes | 23,699 | 23,402 | ||||||
| Other assets, net of accumulated amortization of $1,420 and $1,244, respectively | 2,528 | 2,228 | ||||||
| Goodwill | 4,433 | 4,433 | ||||||
| Total assets | $ | 433,579 | $ | 445,029 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 109,314 | $ | 89,961 | ||||
| Accrued expenses | 76,887 | 69,524 | ||||||
| Current portion of capital lease obligations | 1,326 | 1,435 | ||||||
| Total current liabilities | 187,527 | 160,920 | ||||||
| Deferred rent, less current portion | 17,028 | 19,516 | ||||||
| Capital lease obligations, less current portion | 1,999 | 2,392 | ||||||
| Long-term debt | 10,000 | 54,846 | ||||||
| Other long-term liabilities | 11,988 | 8,524 | ||||||
| Total liabilities | 228,542 | 246,198 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Common stock, $0.01 par value, authorized 50,000,000 shares; issued 24,784,367 and | ||||||||
| 24,562,799 shares, respectively; outstanding 22,012,651 and 21,917,982 shares, respectively | 248 | 246 | ||||||
| Additional paid-in capital | 114,797 | 112,236 | ||||||
| Retained earnings | 124,363 | 118,998 | ||||||
| Less: Treasury stock, at cost; 2,771,716 and 2,644,817 shares, respectively | (34,371 | ) | (32,649 | ) | ||||
| Total stockholders' equity | 205,037 | 198,831 | ||||||
| Total liabilities and stockholders' equity | $ | 433,579 | $ | 445,029 | ||||
| (1) In the first quarter of fiscal 2016, the Company elected to retrospectively early adopt ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that deferred income tax liabilities and assets be classified as non-current in a classified balance sheet. Accordingly, deferred income tax assets in the amount of $11.1 million, which were previously classified as current assets as of January 3, 2016, were reclassified to non-current deferred income tax assets to conform to current year presentation. | ||||||||
| BIG 5 SPORTING GOODS CORPORATION | |||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (Unaudited) | |||||||||
| (In thousands, except per share data) | |||||||||
| Fiscal Quarter Ended | Fiscal Year Ended | ||||||||
| January 1, 2017 |
January 3, 2016 |
January 1, 2017 |
January 3, 2016 |
||||||
| Net sales | $ | 266,283 | $ | 275,006 | $ | 1,021,235 | $ | 1,029,098 | |
| Cost of sales | 178,936 | 189,167 | 696,777 | 704,134 | |||||
| Gross profit | 87,347 | 85,839 | 324,458 | 324,964 | |||||
| Selling and administrative expense (1) (2) (3) (4) (5) | 75,197 | 78,440 | 294,971 | 298,425 | |||||
| Operating income | 12,150 | 7,399 | 29,487 | 26,539 | |||||
| Interest expense | 347 | 538 | 1,551 | 1,791 | |||||
| Income before income taxes | 11,803 | 6,861 | 27,936 | 24,748 | |||||
| Income taxes (6) | 4,109 | 2,586 | 11,050 | 9,451 | |||||
| Net income (1) (2) (3) (4) (5) (6) | $ | 7,694 | $ | 4,275 | $ | 16,886 | $ | 15,297 | |
| Earnings per share: | |||||||||
| Basic | $ | 0.36 | $ | 0.20 | $ | 0.78 | $ | 0.70 | |
| Diluted (1) (2) (3) (4) (5) (6) | $ | 0.35 | $ | 0.20 | $ | 0.77 | $ | 0.70 | |
| Dividends per share | $ | 0.15 | $ | 0.10 | $ | 0.525 | $ | 0.40 | |
| Weighted-average shares of common stock outstanding: | |||||||||
| Basic | 21,607 | 21,601 | 21,607 | 21,741 | |||||
| Diluted | 21,823 | 21,716 | 21,816 | 21,927 | |||||
| (1) In fiscal 2016, the Company recorded pre-tax charges of $1.2 million related to store closing costs. These charges reduced net income by $0.7 million, or $0.03 per diluted share. | |||||||||
| (2) In fiscal 2015, the Company recorded pre-tax charges of $1.6 million related to a publicly-disclosed proxy contest. These charges reduced net income by $1.0 million, or $0.05 per diluted share. | |||||||||
| (3) In fiscal 2015, the Company recorded a pre-tax charge of $0.4 million related to a legal settlement. This charge reduced net income by $0.2 million, or $0.01 per diluted share. | |||||||||
| (4) In the fourth quarter of fiscal 2015, the Company recorded pre-tax charges of $0.4 million related to evaluating store growth strategies and potential profit improvement opportunities. These charges reduced net income by $0.2 million, or $0.01 per diluted share. | |||||||||
| (5) In the fourth quarter of fiscal 2015, the Company recorded a pre-tax non-cash impairment charge of $0.2 million related to an underperforming store. This charge reduced net income by $0.1 million, or $0.00 per diluted share. | |||||||||
| (6) In the fourth quarter and full year of fiscal 2016, the Company recorded (benefits) write-offs of ($0.4) million and $0.5 million, respectively, of deferred tax assets related to share-based compensation. These amounts (increased) reduced net income by the same respective amounts, or ($0.02) per diluted share and $0.02 per diluted share, respectively. | |||||||||
Contact:Big 5 Sporting Goods Corporation Barry Emerson Sr. Vice President and Chief Financial Officer (310) 536-0611ICR, Inc. John Mills Partner (646) 277-1254