Big 5 Sporting Goods Corporation attributed its strongest comp store sales gains in six years to its drawing more affluent consumers with higher end brands as well as more favorable weather and a shift in the Fourth of July holiday.
The El Segundo, CAbased retailer said performance was strong across all 12 western states where it operates 407 stores despite the slow pace of economic recovery the region.
“I don't think the evidence suggests that the economic factors have changed in such a positive manner that could have driven the type of strong results that we produced in the quarter” said Steven G. Miller, chairman, president and CEO. “Some of our largest remain reasonably challenged. Unemployment in California is still over 10% and fuel is up significantly from a year ago and higher than the national average and so forth. We think on the whole that the improved results are really being driven by the merchandise and marketing initiatives, the ongoing evolution of the product mix better aligned with today's consumer.”
BGFV reported net sales increased to $251.8 million in the third quarter ended Sept. 30, 2012 from net sales of $234.7 million in the third quarter ended Oct. 2, 2011. Same store sales were up in every month of the quarter and 5.2 percent for the entire period thanks in part to a small increase in traffic and a mid-single digit increase in average sale.
The result did include a modest bump from the shift in Fourth of July holiday into the third quarter this year and a return to warmer weather compared to a year earlier.
Apparel sales were up in the high single digits thanks to an expanded assortment of branded products at steeper price points, while footwear comped up in the low, single digit and sales of hardgoods were up in the mid-single digits.
“Our apparel categories clearly benefiting from increased focus on branded apparel and bringing up higher average unit retails,” said President CEO Steve Miller.”
There was some softness in football cleats, which Miller attributed to lower participation, which he tied to funding cuts by school athletic and other programs as well as parents rising concerns over head injuries.
Gross margin increased 50 basis points (b.p.) to 33.3 percent, which about 25 points coming from higher merchandise margins and the remainder came from leveraging of store occupancy and distribution costs.
Selling and administrative expense as a percentage of net sales declined 110 b.p. to 27.9 percent. Net income for the third quarter of fiscal 2012 was $8.2 million, or 38 cents per diluted share, up 41 percent after taking a penny per share charge for a store closing.
BGFV ended the quarter with inventory levels per-store down 3.7 percent versus the prior year.
Miller disclosed that BGFV will launch a robust product catalog on its website to kick off the holiday season in a bid to enhance search optimization, drive traffic to its stores and pave the way for the retailer to finally launch an online store in the back half of fiscal 2013.
