- Achieves Third Consecutive Quarter of Positive Same Store Sales
- Declares Quarterly Cash Dividend of
$0.05 Per Share
Net sales for the fiscal 2019 second quarter were
Gross profit for the fiscal 2019 second quarter was
Selling and administrative expense as a percentage of net sales was 30.0% in the fiscal 2019 second quarter versus 31.1% in the second quarter of the prior year. Overall selling and administrative expense for the quarter decreased by
Net income for the second quarter of fiscal 2019 was
For the 26-week period ended
The Company’s revolving credit borrowings were
“We are pleased to achieve our third consecutive quarter of same store sales growth and deliver earnings exceeding the top range of our guidance,” said
Mr. Miller continued, “For the third quarter to date, our sales are running down in the low single-digit range versus the prior year, as the start to the quarter has been impacted by continued softness in summer-related product sales, given the slow start to summer weather, particularly in the Pacific Northwest. We have been comping against relatively strong sales that were driven by favorable weather during the same period last year, but we are encouraged by the trending of a number of core product categories. Looking forward, our sales comparisons will ease over the balance of the quarter and we believe that our merchandise assortment is well positioned to drive upside over the period.”
Quarterly Cash Dividend
The Company's Board of Directors has declared a quarterly cash dividend of
Guidance
For the fiscal 2019 third quarter, the Company expects same store sales to be in the flat to positive low single-digit range and earnings per diluted share to be in the range of
Store Openings
During the second quarter of fiscal 2019, the Company opened one store and for the fiscal 2019 full year the Company currently anticipates opening approximately four new stores and closing approximately five 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. These risks and uncertainties include, among other things, changes in the consumer spending environment, fluctuations in consumer holiday spending patterns, increased competition from e-commerce retailers, 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, disruption in product flow, seasonal fluctuations, weather conditions, changes in cost of goods, operating expense fluctuations, increases in labor and benefit-related expense, 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, risks related to Big 5’s leveraged financial condition, 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) | ||||||||
June 30, 2019 |
December 30, 2018 |
|||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 6,594 | $ | 6,765 | ||||
Accounts receivable, net of allowances of $41 and $28, respectively | 13,728 | 14,184 | ||||||
Merchandise inventories, net | 318,604 | 294,900 | ||||||
Prepaid expenses | 9,746 | 9,224 | ||||||
Total current assets | 348,672 | 325,073 | ||||||
Operating lease right-of-use assets, net | 262,288 | — | ||||||
Property and equipment, net | 71,617 | 76,488 | ||||||
Deferred income taxes | 13,841 | 14,543 | ||||||
Other assets, net of accumulated amortization of $1,902 and $1,772, respectively | 3,446 | 3,457 | ||||||
Total assets | $ | 699,864 | $ | 419,561 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 114,964 | $ | 80,613 | ||||
Accrued expenses | 58,053 | 67,659 | ||||||
Current portion of operating lease liabilities | 61,352 | — | ||||||
Current portion of finance lease liabilities | 2,151 | 2,322 | ||||||
Total current liabilities | 236,520 | 150,594 | ||||||
Operating lease liabilities, less current portion | 213,180 | — | ||||||
Finance lease liabilities, less current portion | 4,375 | 4,823 | ||||||
Long-term debt | 62,437 | 65,000 | ||||||
Deferred rent, less current portion | — | 14,615 | ||||||
Other long-term liabilities | 8,485 | 9,668 | ||||||
Total liabilities | 524,997 | 244,700 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Common stock, $0.01 par value, authorized 50,000,000 shares; issued 25,334,814 and | ||||||||
25,074,307 shares, respectively; outstanding 21,684,601 and 21,424,094 shares, respectively | 253 | 250 | ||||||
Additional paid-in capital | 119,145 | 118,351 | ||||||
Retained earnings (1) | 97,996 | 98,787 | ||||||
Less: Treasury stock, at cost; 3,650,213 shares | (42,527 | ) | (42,527 | ) | ||||
Total stockholders' equity | 174,867 | 174,861 | ||||||
Total liabilities and stockholders' equity | $ | 699,864 | $ | 419,561 | ||||
(1) In the first quarter of fiscal 2019, the Company recorded an after-tax decrease to beginning retained earnings of $0.3 million for a change in accounting principle related to leases. |
BIG 5 SPORTING GOODS CORPORATION | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
(Unaudited) | |||||||||||
(In thousands, except per share data) | |||||||||||
13 Weeks Ended | 26 Weeks Ended | ||||||||||
June 30, 2019 |
July 1, 2018 |
June 30, 2019 |
July 1, 2018 |
||||||||
Net sales | $ | 240,965 | $ | 239,951 | $ | 486,251 | $ | 474,129 | |||
Cost of sales | 167,848 | 164,680 | 337,258 | 326,132 | |||||||
Gross profit | 73,117 | 75,271 | 148,993 | 147,997 | |||||||
Selling and administrative expense (1) | 72,179 | 74,656 | 144,790 | 148,144 | |||||||
Operating income (loss) | 938 | 615 | 4,203 | (147 | ) | ||||||
Interest expense | 738 | 793 | 1,514 | 1,449 | |||||||
Income (loss) before income taxes | 200 | (178 | ) | 2,689 | (1,596 | ) | |||||
Income tax expense (benefit) (2) | 172 | 70 | 997 | (39 | ) | ||||||
Net income (loss) | $ | 28 | $ | (248 | ) | $ | 1,692 | $ | (1,557 | ) | |
Earnings (loss) per share (1)(2): | |||||||||||
Basic | $ | 0.00 | $ | (0.01 | ) | $ | 0.08 | $ | (0.07 | ) | |
Diluted | $ | 0.00 | $ | (0.01 | ) | $ | 0.08 | $ | (0.07 | ) | |
Weighted-average shares of common stock outstanding: | |||||||||||
Basic | 21,118 | 20,985 | 21,074 | 20,964 | |||||||
Diluted | 21,143 | 20,985 | 21,100 | 20,964 | |||||||
(1) In the second quarter of fiscal 2019, the Company recorded a favorable settlement of $1.1 million, or $0.03 per diluted share, related to the termination of a software contract. | |||||||||||
(2) In the first half of fiscal 2019 and 2018, the Company recorded charges of $0.4 million, or $0.02 per diluted share, and $0.2 million, or $0.01 per share, respectively, to write-off deferred tax assets related to share-based compensation. |
Contact:
Big 5 Sporting Goods Corporation
Sr. Vice President and Chief Financial Officer
(310) 536-0611
Managing Partner
(646) 277-1254
Source: Big 5 Sporting Goods Corporation