Following up on a promising first quarter that saw the company post its biggest quarterly same-store sales gain since 2006, management for Big 5 Sporting Goods met with investors at the B. Riley & Co. Conference to discuss growth initiatives for the upcoming year and beyond.
Much of the conversation focused on store growth, with President and CEO Steven Miller emphasizing the importance of continuing to build Big 5’s presence on the Western seaboard. Miller said Big 5 is seeing “great growth opportunities” in markets within its 12-state footprint, adding that the retail climate has created some “attractive” real estate opportunities. Currently, Big 5 operates 387 stores in 12 Western states and has opened an average of 18 net stores over the previous five years. Big 5 opened only three stores in 2009 due to the state of the market. Miller said Big 5 expects to open at least ten new stores in 2010 with an additional five relocations. When asked if and when Big 5 would start a migration east, Miller pointed to the company’s entrance into Wyoming and said “
we are definitely headed in that direction.”
New stores for Big 5 average about 65% of sales of a mature store during the first year of operation while achieving operating margins of about 15%.
Speaking on category segments, Miller said footwear, which accounts for almost a third of the company’s business, has been a particular strength recently. For apparel, Miller said Big 5 will continue to focus on combining “basic and function” particularly in the youth sports arena.
For advertising initiatives, Miller said Big 5 will continue to implement an “aggressive print advertising philosophy.” Miller noted that Big 5 distributed 13 million circulars every week, adding that 45% of total sales come “directly from the products shown in these circulars.”
