Big 5 Sporting Goods Corp. on Monday reported sales results for the fiscal 2019 fourth quarter and full-year ended December 29, 2019, and also lowered its earnings guidance for the fiscal fourth quarter.
For the fiscal 2019 fourth quarter, net sales were $244.1 million compared to net sales of $247.1 million for the fourth quarter of fiscal 2018. Same-store sales decreased 0.6 percent for the fourth quarter of fiscal 2019. The company’s merchandise margins increased by approximately 239 basis points for the fourth quarter of fiscal 2019 compared to the fourth quarter of fiscal 2018.
For fiscal 2019 full-year, net sales increased to $996.5 million from $987.6 million in fiscal 2018. Same-store sales increased 1.2 percent for fiscal 2019 full-year. The company’s merchandise margins increased approximately 66 basis points for fiscal 2019 full-year compared to fiscal 2018.
During the fiscal 2019 fourth quarter, on a same-store basis, sales in the company’s apparel category increased in the mid-single-digit range on the strength of demand for seasonal winter products, sales in its footwear category increased in the positive low single-digit range and sales in its hardgoods category decreased in the mid-single-digit range, largely due to softness in firearms-related products.
The company’s average sales increased in the low single-digit range and customer transactions decreased in the low-single-digit range for the fourth quarter of fiscal 2019 compared to the fourth quarter of fiscal 2018.
For the fiscal 2019 fourth quarter, the company now expects to generate earnings per diluted share in the range of $0.02 to $0.04, which compares to the company’s previous guidance for the fourth quarter of a loss per share in the range of $0.04 to $0.16.
For the fiscal 2019 full-year, the company now expects to generate earnings per diluted shares in the range of $0.40 to $0.42, including a net benefit of $0.01 per diluted share related to the favorable settlement of a software contract termination in the second quarter which was partially offset by a charge for the write-off of deferred tax assets related to share-based compensation in the first quarter.
For purposes of comparison to the prior year, for the fiscal 2018 fourth quarter, the company realized a loss of $0.24 per share, which included $0.08 per share of charges as previously reported, and for fiscal 2018 full-year, the company realized a loss of $0.17 per share which included $0.09 per share of charges as previously reported.
Earnings guidance for the fiscal 2019 fourth quarter and full-year is unaudited and excludes any charges to be determined related to potential asset impairment.
Fiscal year-end debt levels totaled $66.6 million as of December 29, 2019, compared to $65 million at the end of fiscal 2018. Total merchandise inventory increased approximately 5.4 percent for fiscal 2019 year-end versus the prior year, in part reflecting strategic inventory investments ahead of anticipated cost increases.
“With our strong fourth-quarter performance, we are pleased to provide updated earnings guidance reflecting significant earnings growth over the full-year as well as quarterly earnings exceeding the top-end of our prior guidance range,” said Steven G. Miller, the company’s chairman, president and CEO.
“Although our same-store sales were slightly down for the quarter, our strategic decisions regarding pricing and promotions over the holiday period contributed to the extraordinary expansion of merchandise margins which drove a 4.7 percent increase in same-store gross margin dollars. Additionally, our updated guidance reflects our team’s ongoing focus on actively managing expenses as well as a favorable benefit from distribution costs capitalized into inventory. We are pleased that our merchandise margin expansion and sound expense management have positioned our business for substantial year-over-year earnings growth.”
The company expects to issue earnings results for the fiscal 2019 fourth quarter and full-year by the end of February.