Big 5 Sporting Goods is reportedly off to another good year after reporting its eighth straight year of comp store sales increase and its 32nd consecutive quarterly gain. Management characterized the start to 2004 as “wonderful” due to “favorable weather conditions” in most of their markets. The retailer expects to see diluted earnings per share in the 23 cents to 25 cents range in the current first quarter on same-store sales growth in the “mid-single-digit range”, equating to a 33% to 66% increase over first quarter 2003 earnings of 15 cents per diluted share.

BGFV saw 2003 Q4 sales increase 8.5% to $191.8 million from $176.7 million in the year-ago period. Same store sales increased 3.6%, the retailer’s largest quarterly comp store gain for the year. Management said they were up “comfortably” across all regions and categories and that the sales gains were driven by “increased customer traffic” and a “slight increase” in the average ticket.
Reported net income was up 12.5% for the quarter to $9.9 million, or 43 cents per diluted share, from $8.8 million, or 39 cents per diluted share, in the same period last year. Gross margins for the quarter improved by 50 basis points to 36.6% compared to 36.1% in Q4 2002. The gross margin uptick reportedly came entirely from improvement in merchandise margins.

Inventory per store at year-end declined slightly from $616,000 per store to $613,000 at year-end 2002.
There was a slight shift in the breakdown of sales per merchandise category for the year as apparel and hardgoods growth outpaced the footwear increase. Hardlines are now 53.5% of sales and apparel was 16.1% of sales. Footwear was lost 40 basis points of share of sales to 30.4% of total sales.

For full year 2004, Big 5 is estimating earnings per diluted share in the $1.47 to $1.53 range, and increase of 27% to 32% from fiscal 2003 EPS. The increase comes with the expectation of comp store sales growth in the “low to mid-single-digit” range. The year will have an extra week in 2004, which is expected to add 1.75% to total sales, but have a negligible impact on earnings for Q4 or the year.