Big 5 Sporting Goods Corp. on Tuesday reported net income for the fiscal third quarter ended September 29 was $6.4 million, or 30 cents per diluted share, compared to net income for the third quarter of fiscal 2018 of $3.1 million, or 15 cents per diluted share.

Net sales for the fiscal third quarter were $266.2 million, flat compared to net sales of $266.4 million for the third quarter of fiscal 2018. Same store sales increased 0.3 percent for the third quarter of fiscal 2019, which represents the Company’s fourth consecutive quarter of positive same-store sales.

Gross profit for the fiscal 2019 third quarter was $86 million, compared to $82.5 million in the third quarter of the prior year. The Company’s gross profit margin was 32.3 percent in the fiscal 2019 third quarter, versus 31 percent in the third quarter of the prior year.

Selling and administrative expense as a percentage of net sales was 28.9 percent in the fiscal 2019 third quarter versus 29.2 percent in the third quarter of the prior year. Overall selling and administrative expense for the quarter decreased $0.8 million from the prior year.

For the 39-week period ended September 29, 2019, net sales increased to $752.4 million from net sales of $740.5 million in the first 39 weeks of last year. Same store sales increased 1.8 percent in the first 39 weeks of fiscal 2019 versus the comparable period last year. Net income for the first 39 weeks of fiscal 2019 was $8.1 million, or $0.38 per diluted share, including a $0.02 per diluted share charge for the write-off of deferred tax assets related to share-based compensation, compared to net income for the first 39 weeks of fiscal 2018 of $1.6 million, or $0.07 per diluted share, including a $0.01 per diluted share charge for the write-off of deferred tax assets related to share-based compensation.

Operating cash flow for the 2019 fiscal year-to-date period was a positive $13.7 million, compared to a negative $8.1 million in the prior year period. This $21.7 million improvement in operating cash flow contributed to reduced revolving credit borrowings year-over-year, with $60.6 million in borrowings at quarter-end, reflecting a $22.9 million or 27 percent improvement versus the prior year.

“With our fourth consecutive quarter of same-store sales growth, we delivered earnings significantly ahead of our guidance and double the prior year’s third quarter earnings,” said Steven G. Miller, the company’s chairman, president and CEO. “A huge contributor to the strong earnings performance was the 94 basis-point expansion of our merchandise margins, which marked our strongest margin performance of any third quarter since we became a publicly traded company in 2002. The increase reflects a shift in sales mix toward higher-margin products along with the successful impact of our efforts to optimize pricing and promotions.”

Mr. Miller continued, “Our fourth quarter is off to a solid start, with our year-over-year sales and merchandise margin trends accelerating from the third quarter. October is a very low volume period for our business, and as always, the keys to the fourth quarter will be the holiday period and the start of the winter selling season across our markets. We feel well positioned from a promotional standpoint for the holiday season and believe that our fresh seasonal inventory will resonate well with our customers when winter weather arrives.”

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 December 13, 2019, to stockholders of record as of November 29, 2019.

Guidance
For the fiscal 2019 fourth quarter, the company expects same store sales to be in the positive low single-digit range and expects to realize a loss per share in the range of $0.04 to $0.16, compared to a same store sales increase of 1.1 percent and a loss per share of $0.24, including $0.08 per share of charges primarily related to asset impairment and contract termination costs, in the fourth quarter of fiscal 2018. Fiscal 2019 fourth quarter earnings guidance reflects an expectation for continued merchandise margin expansion over the prior year period. Given the company’s fourth quarter guidance, the company expects fiscal 2019 full year earnings to be in the range of $0.22 to $0.34 per diluted share.

Store Openings
During the third quarter of fiscal 2019, the company closed one store. During the fiscal 2019 fourth quarter, the company anticipates opening two stores, including the relocation of one store that closed during the quarter. For the fiscal 2019 full year, the company anticipates opening three stores and closing five stores, including one relocation.