Big 5 Sporting Goods Corporation fiscal 2006 fourth quarter, net sales increased 7.1%, to $234.5 million from net sales of $218.9 million for fiscal 2005. Same store sales increased 4.2% for the fourth quarter, representing the Company's 44th consecutive quarter of positive same store sales comparisons.

Gross profit for the fiscal 2006 fourth quarter increased 11.7% to $83.1 million from $74.4 million in the fourth quarter of the prior year. The Company's gross profit margin improved to 35.4% in the fiscal 2006 fourth quarter from 34.0% in the fourth quarter of the prior year. The margin improvement was driven primarily by an increase of 60 basis points in product selling margins, a favorable reduction in inventory reserve provisions and a decline of $1.9 million in distribution center expenses due to facility transition costs incurred in the prior year. These improvements were partially offset by a $1.5 million reduction in inventory cost capitalization from the fourth quarter of the prior year.

Selling and administrative expense as a percentage of net sales was 25.8% in the fiscal 2006 fourth quarter versus 25.1% in the fourth quarter of last year. Contributing to this increase were lower co-op advertising cost reimbursements from vendors due to recording these reimbursements earlier in the year, and stock compensation expense that was not incurred in the prior year. Excluding the effects of these items, the Company's selling and administrative expense as a percentage of sales declined year-over-year in the fourth quarter.

Net income for the fourth quarter of fiscal 2006 increased to $9.6 million, or $0.42 per diluted share, from net income of $7.7 million, or $0.34 per diluted share, for the fourth quarter of fiscal 2005. Results for the fourth quarter of fiscal 2006 include a pre-tax charge of $0.6 million ($0.4 million after-tax), or $0.02 per diluted share, for the expensing of stock options.

For the fiscal 2006 full year ended December 31, 2006, net sales increased $62.8 million, or 7.7%, to $876.8 million from net sales of $814.0 million for fiscal 2005. Same store sales increased 4.0% in the fiscal 2006 full year versus the prior year. Net income was $30.8 million, or $1.35 per diluted share, for the fiscal 2006 full year, compared to net income of $27.5 million, or $1.21 per diluted share, in the fiscal 2005 full year. Results for fiscal 2006 include pre-tax charges totaling $2.3 million ($1.4 million after-tax), or $0.06 per diluted share, for the expensing of stock options.

During the fiscal 2006 fourth quarter, the Company used cash from operations to prepay the remaining $8.3 million of the Company's higher interest term loan debt, and to reduce borrowings under the Company's revolving credit facility. The Company's short and long-term debt at the end of fiscal 2006 totaled $77.1 million, compared to $95.4 million at the end of fiscal 2005.

“We are pleased to report an outstanding fourth quarter and full year,” said Steven G. Miller, the Company's Chairman, President and Chief Executive Officer. “We delivered strong sales and improved product margins and we leveraged store-related expenses for the quarter. We achieved sales gains in each of our three major merchandise categories of footwear, hard goods and apparel, with apparel being our strongest performing category for the quarter, benefiting in part from favorable winter weather comparisons in many of our markets. Our new distribution center contributed to our strong performance, functioning very well over our first holiday season operating exclusively out of the new facility. Our business also generated significant cash flow during the quarter, which we used to meaningfully reduce our year-end debt levels.”

For the first quarter of fiscal 2007, the Company expects to realize same store sales growth in the low single-digit range and earnings per diluted share in the range of $0.30 to $0.33. The Company expects full-year same store sales growth in the low single-digit range and full-year earnings per diluted share in the range of $1.47 to $1.57. Compared to the prior year, first quarter guidance reflects lower distribution center expenses due to facility transition costs incurred in the prior year, offset by a reduction in inventory cost capitalization.

The Company opened nine new stores during the fourth quarter of fiscal 2006, bringing its store count at the end of fiscal 2006 to 343 stores. During the fiscal 2007 first quarter to-date, the Company has opened three new stores, including one relocation, and has closed an additional store in preparation for its relocation during the second quarter. The Company anticipates opening approximately 20 new stores, net of relocations, during fiscal 2007.