Big 5 Shrugs Off DC Impact to Post Solid Second Quarter Results…

Big 5 Sporting Goods posted its 42nd consecutive quarter of comparable sales increases in Q2 and fought off a slight decrease in gross margins on their way to strong double-digit gains on the bottom line. Management attributed their sales gains to “a combination of increased customer traffic and a higher average transaction size.” They said that the start to the quarter was softer than normal as a result of heavy rains and the shift in Easter — when the company closes its doors for the day — to Q2 from the first quarter last year.

On the merchandise front, management said that the company comped positively in each of the major merchandise categories, with footwear, hardgoods, and apparel all posting gains. Footwear and hardgoods were each up in the “low-single-digit range,” where apparel showed a “high-single-digit increase” for the quarter. In addition, the company saw positive comp results in each of the ten states in which it is currently operating.

Product margins increased 20 basis points in Q2 over last year, with gains coming in each of the product categories. However, gross margin did decrease slightly as a percentage of net sales due to an increase of $2.2 million in distribution center costs over the prior year, costs which management sees as “relatively constant” going forward.

The company expects comparable store sales to grow in the low- to mid-single-digit range for the third quarter, fueling earnings per share contributions in the range of 32 cents to 36 cents, including a two cents per diluted share charge for the expensing of stock options. For the full-year, BGFV expects low- to mid-single-digit comp sales growth with diluted earning per share falling between $1.26 and $1.33, including a 6 cents per share charge for stock options expensing.