Big 5 Keeps Comps Streak Alive with Solid Q3…

Big 5 Sporting Goods Corp. continued its streak of comparable store sales increase in the fiscal third quarter ended October 1, posting a 3.8% same-store sales gain on top of a 2.6% increase in the year-ago period. The increase came on the back of increased customer traffic and a higher average transaction size and reflected gains across footwear, apparel, and hardgoods. Company President and CEO Steve Miller said that “apparel was slightly stronger than hardgoods, which was slightly stronger than footwear.”

Gross margins took a hit for the quarter, declining 80 basis points on higher distribution center costs over the prior year and a significantly lower benefit from inventory cost capitalization than BGFV saw last year.

The net income increase for the quarter was held back by an after-tax charge of $0.4 million for the expensing of stock options this year and the receipt in Q3 last year of $1.8 million in settlement proceeds in an eminent domain action related to a company store.

The company opened five new stores in Q3, bringing its store count at the end of the quarter to 334 stores. With two new stores already opened in the fourth quarter to-date and another seven in the pipeline for the period, Big 5 should finish with a total of 19 new store openings during fiscal 2006 and finish the year with 343 stores at year-end.

BGFV expects to see fourth quarter diluted EPS in the range of 34 cents to 40 cents per share on same-store sales growth in the low- to mid-single-digit range. Full year diluted EPS is expected to be in the range of $1.27 to $1.33 per share on comp sales growth in the low- to mid-single-digit range.