Big 5 Sporting Goods reported earnings reached $5.3 million, or 24 cents a share, in the first quarter, compared to a net loss for the first quarter of fiscal 2016 of $1.1 million, or 5 cents, a year ago.

Results for the first quarter of fiscal 2016 included a charge of 3 cents per basic share for the write-off of deferred tax assets related to share-based compensation.

The company had projected earnings per diluted share to be in the range of 12 to 18 cents a share.

For the fiscal 2017 first quarter ended April 2,, net sales were $252.6 million compared to net sales of $234.5 million for the first quarter of fiscal 2016. Same store sales increased 7.9 percent for the first quarter of fiscal 2017, reflecting continued market share gains resulting from the closure of certain major competitors last year along with more favorable weather conditions than the prior year period. Sales comparisons also benefited from the calendar shift of the Easter holiday, during which the company’s stores are closed, from the first quarter in fiscal 2016 to the second quarter in fiscal 2017.

The company had expected same store sales to be in the positive mid-single-digit range compared to a same store sales decrease of 1.9 percent in the first quarter of fiscal 2016.

Gross profit for the fiscal 2017 first quarter was $83.6 million, compared to $71.0 million in the first quarter of the prior year. The company’s gross profit margin was 33.1 percent in the fiscal 2017 first quarter versus 30.3 percent in the first quarter of the prior year, reflecting an increase in merchandise margins of 228 basis points and a decrease in store occupancy and distribution costs as a percentage of net sales.

Selling and administrative expense as a percentage of net sales was 29.5 percent in the fiscal 2017 first quarter versus 30.4 percent in the first quarter of the prior year. Overall selling and administrative expense for the quarter increased by $3.4 million from the prior year primarily due to higher employee labor and benefit expense.

“We are pleased to begin fiscal 2017 with an extraordinarily strong performance,” said Steven G. Miller, the company’s chairman, president and Chief Executive Officer. “We realized improvements in both customer transactions and average sale and produced same store sales increases for each of our major merchandise categories of apparel, footwear and hardgoods, while substantially improving merchandise margins for the period. Our team did an outstanding job of extending our market share gains following the store closures by our competitors that occurred last year, as well as capitalizing on the favorable weather conditions that we experienced in a majority of our markets during the first quarter. These efforts led to better than anticipated sales during March and allowed us to produce results meaningfully ahead of the guidance that we issued in late February.”

Miller continued, “We are off to a strong start for the second quarter and believe that we are well positioned for the beginning of the summer selling season as we continue to focus our efforts around maximizing the benefit from the competitive store closures and highlighting the convenience and value that Big 5 Sporting Goods offers.”

Quarterly Cash Dividend
The company’s Board of Directors has declared a quarterly cash dividend of $0.15 per share of outstanding common stock, which will be paid on June 15, 2017 to stockholders of record as of June 1, 2017.

Guidance
For the fiscal 2017 second quarter, the company expects same store sales to be in the positive mid-single-digit range and earnings per diluted share to be in the range of $0.14 to $0.20, compared to a same store sales decrease of 1.7 percent and earnings per diluted share of $0.10 in the second quarter of fiscal 2016. Fiscal 2017 second quarter guidance reflects an anticipated small negative impact as a result of the calendar shifts of the Easter and Fourth of July holidays.

Store Openings
During the first quarter of fiscal 2017, the company opened one store, which was a relocation, and closed two stores, one of which was a relocation, ending the quarter with 431 stores in operation. The company has opened one store in the second quarter to date and anticipates opening one additional store in the remainder of the second quarter. For the fiscal 2017 full year, the company currently anticipates opening approximately eight new stores and closing approximately three stores.

Photo courtesy Big 5 Sporting Goods