Big 5 Sporting Goods Corp. reported earnings slid 19.2 percent in the second quarter as same-store sales declined 1.7 percent.

For the fiscal 2016 second quarter, net sales were $241.4 million, compared to net sales of $240.4 million for the second quarter of fiscal 2015. As anticipated, net sales comparisons to the prior year were favorably impacted by the calendar shift from a 53-week fiscal year in 2015. This caused fiscal 2016 to begin one week later than fiscal 2015, and resulted in pre-Fourth of July holiday sales moving from the third quarter in fiscal 2015 to the second quarter in fiscal 2016. The calendar shift of the Easter holiday from the second quarter of fiscal 2015 to 2016’s first quarter, during which the company’s stores are closed, was also a factor. These calendar shifts benefited net sales comparisons to the second quarter of fiscal 2015 by approximately $6.8 million.

Same store sales decreased 1.7 percent for the second quarter of fiscal 2016 versus the comparable 13-week period in the prior year. Same store sales comparisons were not materially impacted by the calendar shifts discussed above because same store sales comparisons are made on a comparable week basis.

Gross profit for the fiscal 2016 second quarter was $76.3 million, compared to $77.3 million in the second quarter of the prior year. The company’s gross profit margin was 31.6 percent in the fiscal 2016 second quarter versus 32.1 percent in the second quarter of the prior year, reflecting an increase in distribution and store occupancy costs as a percentage of net sales, as merchandise margins were even with the second quarter of fiscal 2015.

Selling and administrative expense as a percentage of net sales was 29.9 percent in the fiscal 2016 second quarter versus 30.2 percent in the second quarter of the prior year. Overall selling and administrative expense for the quarter decreased $0.4 million from the prior year, primarily due to proxy contest costs in 2015, partially offset by higher employee labor and benefit-related expense.

Net income for the second quarter of fiscal 2016 was $2.1 million, or $0.10 per diluted share, including $0.01 per diluted share for the write-off of deferred tax assets related to share-based compensation, compared to net income for the second quarter of fiscal 2015 of $2.6 million, or $0.12 per diluted share, including $0.03 per diluted share for a charge associated with the company’s proxy contest.

For the 26-week period ended July 3, 2016, net sales were $475.9 million compared to net sales of $484.0 million in the first 26 weeks of last year. Net sales comparisons in the 26 weeks ended July 3, 2016 were favorably impacted by the calendar shifts discussed above, which benefited net sales comparisons to the first 26 weeks of fiscal 2015 by approximately $2.9 million. Same store sales decreased 1.8 percent in the first 26 weeks of fiscal 2016 versus the comparable period last year. Same store sales comparisons were not materially impacted by the calendar shift because same store sales comparisons are made on a comparable week basis. Net income for the first 26 weeks of fiscal 2016 was $1.0 million, or 5 cents per diluted share, including 4 cents per diluted share of charges for the write-off of deferred tax assets related to share-based compensation, compared to net income of $4.9 million, or 22 cents per diluted share, including 6 cents per diluted share of charges for a legal settlement and expenses associated with the company’s proxy contest, for the first half of fiscal 2015.

“We are pleased to exceed our second-quarter earnings guidance in a highly competitive and promotional retail environment,” said Steven G. Miller, the company’s chairman, president and Chief Executive Officer. “While sales across all of our major product categories of hardgoods, footwear and apparel were negatively impacted by the liquidation efforts of Sports Authority and Sport Chalet in our markets, we held merchandise margins flat with the prior-year period and maintained tight control of our expenses and inventory. We ended the quarter with per-store inventories down 9.1 percent from the prior year and we reduced borrowings under our credit facility by 19 percent to $57.4 million compared to the second quarter of fiscal 2015.”

Miller continued, “We are off to a strong start in the third quarter, with same store sales for the quarter to date up in the high mid-single-digit range as we are beginning to benefit from numerous competitive store closures in our markets and customer recognition of the convenience, strong product assortment and value that Big 5 Sporting Goods offers. We are very focused on positioning our merchandise mix and promotional efforts to take full advantage of the opportunities that this competitive rationalization provides. Our confidence in the strength of our business model and our continuing commitment to return value to shareholders is reflected in the new $25 million share repurchase program that we announced today.”

New Share Repurchase Program

The company’s board of directors has authorized a new share repurchase program for the purchase of up to $25 million of the company’s common stock. This program replaces the company’s previous share repurchase program, under which $2.9 million remained available for repurchases. Under the current authorization, the company may purchase shares from time to time in the open market or in privately negotiated transactions in compliance with the applicable rules and regulations of the Securities and Exchange Commission. However, the timing and amount of such purchases, if any, would be at the discretion of the company’s management and board of directors, and would depend on market conditions and other considerations.

Quarterly Cash Dividend

The company’s board of directors has declared a quarterly cash dividend of 12.5 cents per share, which will be paid on September 15, 2016 to stockholders of record as of September 1, 2016.

Guidance

For the fiscal 2016 third quarter, the company expects same store sales to be in the positive mid- to high-single-digit range, and earnings to be in the range of 23 cents to 30 cents per diluted share. The company expects fiscal third-quarter net sales comparisons to the prior year to be adversely impacted by approximately $9 million, or approximately 8 cents to 9 cents per diluted share, as a result of the calendar shifts. This anticipated impact is reflected in the company’s earnings guidance for the fiscal 2016 third quarter, but it is not reflected in the company’s same store sales guidance for the period because the company reports same store sales on a comparable week basis. The company’s earnings guidance for the third quarter also reflects a charge of approximately 4 cents per diluted share related to store closings.

Store Openings

During the second quarter of fiscal 2016, the company opened two new stores and closed one store, ending the quarter with 435 stores in operation. During the fiscal 2016 third quarter, the company anticipates opening two new stores and closing five stores. For the fiscal 2016 full year, the company currently anticipates opening approximately five to eight new stores and closing approximately ten stores.