Big 5 Sporting Goods Corporation on Tuesday reported financial net sales for the third quarter ended September 30 of $266.4 million, down from net sales of $270.5 million for the third quarter of fiscal 2017.
Same-store sales decreased 2 percent for the third quarter of fiscal 2018. As anticipated, fiscal 2018 third quarter sales comparisons to the prior year reflect a small benefit from the calendar shift related to the Fourth of July holiday.
Gross profit for the fiscal 2018 third quarter was $82.5 million compared to $87.5 million in the third quarter of the prior year. The company’s gross profit margin was 31 percent in the fiscal 2018 third quarter versus 32.4 percent in the third quarter of the prior year primarily reflecting higher distribution and store occupancy expenses as a percentage of net sales. The company also realized a slight contraction of merchandise margins of 10 basis points year-over-year due in part to added promotions related to the calendar shift of the July 4 holiday.
Selling and administrative expense as a percentage of net sales was 29.2 percent in the fiscal 2018 third quarter versus 28.6 percent in the third quarter of the prior year. Overall selling and administrative expense for the quarter increased $0.3 million from the prior year mainly due to higher employee labor and benefit-related expense partially offset by lower advertising expense.
Net income for the third quarter of fiscal 2018 was $3.1 million, or $0.15 per diluted share, compared to net income for the third quarter of fiscal 2017 of $6 million, or $0.28 per diluted share.
For the 39-week period ended September 30, 2018, net sales were $740.5 million compared to net sales of $766.7 million in the first 39 weeks of last year. Same-store sales decreased 3.9 percent in the first 39 weeks of fiscal 2018 versus a 1.7 percent increase in the comparable period last year. Net income for the first 39 weeks of fiscal 2018 was $1.6 million, or $0.07 per diluted share, including a $0.01 per diluted share charge for the write-off of deferred tax assets related to share-based compensation, compared to net income for the first 39 weeks of fiscal 2017 of $14.1 million, or $0.65 per diluted share.
“Our results for the third quarter reflect positive, same-store sales in July offset by lower-than-expected sales in August and September,” said Steven G. Miller, the company’s chairman, president and CEO. “While we are disappointed with our sales performance, we are pleased with our ability to diligently manage our product margins and expenses and generate earnings per share within our guidance range. Despite the softness in sales, we continue to make progress right-sizing our inventory levels and believe our inventory is well-positioned for the fourth quarter.”
Miller continued, “We are focused on enhancing our product assortment and marketing strategy to succeed in the evolving retail environment. While consumer spending over the holiday season and winter weather conditions in our markets are difficult to predict, we are cautiously optimistic that our results for the fourth quarter will benefit from a number of initiatives to drive traffic and sales.”
Quarterly Cash Dividend
The company’s board of directors has declared a quarterly cash dividend of $0.05 per share of outstanding common stock which will be paid on December 14, 2018 to stockholders of record as of November 30, 2018. This dividend, which represents a reduction from the previous quarterly cash dividend rate of $0.15 per share, reflects the company’s intent to utilize capital to maintain a healthy financial condition.
For the fiscal 2018 fourth quarter, the company expects same-store sales to be in the range of negative low single-digits to positive low single-digits and expects to realize a loss per share in the range of $0.15 to $0.25.
During the third quarter of fiscal 2018, the company opened one store. The company anticipates opening one store during the fiscal 2018 fourth quarter. For the fiscal 2018 full year, the company anticipates opening four new stores and closing two stores.