For the fiscal 2008 third quarter ended Sept. 28, net sales for Big 5 Sporting Goods Corporation declined 3.5% to $223.2 million while comps declined 6.6%, primarily due to a decrease in customer traffic. The declining results and tighter credit markets caused the company to reduce fourth quarter guidance and consider cutting back store openings in 2009.
“Just given the uncertainties of the extent and duration of the economic downturn, we may think its prudent to be cautious and do a lot of evaluation in terms of new stores ” said Chairman, President and CEO Steve Miller during an earnings conference call on Nov. 3. The company currently plans to open three new stores in 2009, compared to 19 opened this year. It has no plans to close stores.
The company expects a decline in same-store sales in the mid-to-high single-digit range for the fourth quarter, and earnings per diluted share in the range of 7 to 17 cents. For the full year, Big 5 expects a decline in same-store sales in the mid- to high-single-digit range, and earnings per diluted share in the range of 55 to 65 cents. Miller stated that the companys weakest sales of the quarter occurred during the last two weeks, “when our nations economy seemed to go from bad to worse.”
At quarters end, total chain-wide inventories were down 4.9% from the prior year, despite the addition of 19 stores.
That represented a decrease of 9.7% on a per-store basis. Additionally, the company said lenders imposed tighter loan covenants that could restrict stock buybacks in the future depending on borrowing levels.
Gross profit for the fiscal 2008 third quarter was $74.3 million, compared to $79.4 million in the third quarter of the prior year. Apparel, footwear, and hard goods sales declined in the mid- to high-single-digit range. Apparel was the strongest category and footwear was the weakest, reflecting the impact of roller shoes, which in the third quarter accounted for 55 basis points of Big 5s overall comp sales decline.
