Big 5 Sporting Goods Corporation’s same-store sales fell 4.7% in the fourth quarter and will do more of the same throughout 2008. The retailer said it expects same-store sales to decline in the low to mid-single-digit range in the first quarter and for the full fiscal year. The guidance assumes current economic conditions persist all year.  Overall sales for the quarter dipped 1.0% to $232.1 million from $234.5 million for the year-ago period.  Plummeting sales of wheeled footwear accounted for approximately 45% of the same-store sales decline in the fourth quarter, according to management.  Declining sales of the shoes will continue to be a drag on sales growth into the third quarter, but margins on the category are expected to improve by year-end.

Big 5, which operates 366 stores in 11 Western states, said a larger concern is a worsening economy that is cutting into store traffic, particularly in California, Arizona and Nevada.


“It is no secret that the softness in the retail environment has continued into the first quarter,” said President and CEO Steve Miller. “Although in mid-January weather conditions turned favorable for our sales of winter-related products, we have not experienced strength in many of our other product categories.”


Big 5’s net income for the fourth quarter plunged 35.4% to $6.2 million, from $9.6 million for the fourth quarter of fiscal 2006. Gross margin dipped 20 basis points to 34.1%, leaving gross profits essentially flat. Lower margins were driven primarily by a 35-basis-point decline in product selling margins and higher store occupancy costs.


Selling and administrative expenses as a percentage of net sales rose 220 basis points to 28.8%, due to lower-than-anticipated Holiday sales, a higher store count and higher advertising expenses.
Despite what Miller described as one of the most difficult retail environment in decades, Big 5 will open 20 net new stores in 2008, or twice as many as last year.


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