Big 5 Sporting Goods Corp. reported it expects earnings of 23 cents to 25 cents a share in the fourth quarter compared to a previously issued guidance range of 25 to 33 cents a share.
Big 5's estimate excludes a net charge of 7 cents a share related to legal matters.
During the fiscal 2009 fourth quarter, the company's earnings per diluted share were 32 cents a share, excluding a net charge of 3 cents per diluted share related to legal matters.
For the 13-week fiscal 2010 fourth quarter, net sales were $226.7 million, compared to net sales of $237.6 million for the 14-week fourth quarter of fiscal 2009. Same store sales decreased 0.7% for the fourth quarter of fiscal 2010.
Big 5 said that after achieving same store sales growth in the low-to-mid single-digit range through the first two months of the quarter, which included the “Black Friday” weekend, sales trends turned negative during the shopping period before Christmas. During the quarter, the company's apparel sales increased in the low single-digit range, footwear sales were relatively flat and hardgoods sales decreased in the low single-digit range, all on a same store basis compared to the same period last year. The company's merchandise margins decreased 20 basis points for the fourth quarter from the fourth quarter of 2009. As a reminder, the company's merchandise margins improved 88 basis points during the fourth quarter of 2009 over the prior year period.
“We are disappointed that our sales results came in below expectations for the fourth quarter,” said Steven G. Miller, the company's chairman, president and chief executive officer. “We achieved same store sales in the positive low-single-digit range for October and positive mid-single-digit range for November, which included the 'Black Friday' weekend. However, these gains were offset as our sales turned negative over the three-week key gift shopping period preceding Christmas. We are encouraged that positive sales trends resumed after Christmas and have continued into the start of 2011. We are also pleased to have further strengthened our balance sheet during the quarter, as our positive cash flow allowed us to reduce borrowings under our credit facility by 12% to $48.3 million at year-end compared to the end of fiscal 2009.”
For the 52-week fiscal 2010 full year, net sales increased to $896.8 million from $895.5 million for the 53-week fiscal 2009 full year. Same store sales increased 0.8% for the fiscal 2010 full year.
For the fiscal 2010 full year, the company now expects to realize earnings per diluted share in the range of $0.99 to $1.01, excluding the net charge of $0.07 per diluted share, compared to earnings per diluted share in the prior year of $1.04, excluding the net charge of $0.03 per diluted share.
During the fourth quarter of fiscal 2010, the company recorded a net pre-tax charge of $2.3 million, or 7 cents per diluted share after tax, for lawsuits previously disclosed in the company's filings with the SEC, of which $1.5 million will be classified as selling and administrative expense and $0.8 million will be classified as a reduction in net sales. Including this charge, the company expects to realize earnings per diluted share for the fiscal 2010 fourth quarter in the range of 16 cents to 18 cents a share. In the fourth quarter of fiscal 2009, the company's earnings per diluted share were $0.29, including a net pre-tax charge of approximately $1.0 million, or 3 cents per diluted share after tax. Including the legal charges in both periods, for the fiscal 2010 full year, the Company expects to realize earnings per diluted share in the range of 92 to 94 cents compared to earnings per diluted share of $1.01 in the prior year.
The company expects to issue earnings results for the fiscal 2010 fourth quarter and full year, as well as provide guidance for the first quarter of fiscal 2011, by the first week of March.
