Big 5 Sporting Goods, in line with guidance reported in early January, reported a loss of 10 cents per share in the fourth quarter ended December 31 as comps dropped 9.4 percent. Same store sales in January slumped in the high teens in January, and Big 5 predicted a loss for the first quarter.

Net sales for the fiscal 2017 fourth quarter were $242.9 million compared to net sales of $266.3 million for the fourth quarter of fiscal 2016. Same-store sales decreased 9.4 percent for the fourth quarter of fiscal 2017 compared to a 3.1 percent increase in same store sales for the fourth quarter of fiscal 2016.

Gross profit for the fiscal 2017 fourth quarter was $72.9 million, compared to $87.3 million in the fourth quarter of the prior year. The company’s gross profit margin was 30.0 percent in the fiscal 2017 fourth quarter versus 32.8 percent in the fourth quarter of the prior year, reflecting a decrease in merchandise margins of 126 basis points and an increase in store occupancy and distribution costs as a percentage of net sales.

Selling and administrative expense as a percentage of net sales was 33.3 percent in the fiscal 2017 fourth quarter versus 28.2 percent in the fourth quarter of the prior year. Overall selling and administrative expense for the quarter increased $5.6 million from the prior year, primarily due to higher employee labor and benefit-related expense and non-cash impairment charges of $4.4 million for the write-off of goodwill and $0.6 million related to three stores.

Net loss for the fourth quarter of fiscal 2017 was $13.0 million, or $0.62 per share, reflecting after-tax charges totaling $10.9 million, or $0.52 per share, comprised of $0.26 per share to revalue existing net deferred tax assets as a result of the enactment of the Tax Cuts and Jobs Act in December 2017, $0.21 per share for goodwill impairment, $0.02 per share for asset impairment related to three stores and $0.03 per share to establish a deferred tax asset valuation allowance. For the fourth quarter of fiscal 2016, net income was $7.7 million, or $0.35 per diluted share, including $0.02 per diluted share for a tax benefit related to share-based compensation.

The loss before charges came to a loss of 10 cents a share against earnings of 33 cents a year ago.

On January 8, Big 5 revised its Q4 guidance to a loss in the  range of  8 cents to 13 cents excluding charges due to the weather. The company’s previous guidance for the fourth quarter of fiscal 2017 was for earnings per diluted share to be in the range of 16 to 28 cents.

For the fiscal 2017 full year, net sales were $1.01 billion, compared to net sales of $1.02 billion for the fiscal 2016 full year. Same-store sales decreased 1.2 percent in fiscal 2017 versus the comparable period in the prior year. Net income for fiscal 2017 was $1.1 million, or $0.05 per diluted share, reflecting after-tax charges in the fourth quarter totaling $10.9 million, or $0.52 per diluted share, as described above. Net income for fiscal 2016 was $16.9 million, or $0.77 per diluted share, including $0.05 per diluted share of charges for store closing costs and the net write-off of deferred tax assets related to share-based compensation.

Steven G. Miller, the company’s chairman, president and chief executive officer, said, “Our fourth quarter operating results were in line with the guidance we provided in January. As we previously reported, our performance was impacted by an extraordinarily challenging December period as a result of extremely unfavorable winter weather conditions in most of our markets. The significantly warmer-than-normal temperatures and one of the driest periods on record in our Western U.S. markets led to a nearly 50 percent decline in sales for our core winter product categories in December. Sales throughout the quarter also continued to be impacted by reduced demand for firearm-related products.”

Miller continued, “Record warm and dry weather conditions in our markets have continued to dramatically impact winter product sales comparisons during the first quarter, especially in January, as we faced extremely favorable winter weather conditions last year. While same-store sales decreased in the high teens in January, sales trends improved each week throughout February as other non-winter products became more significant to our overall sales mix. Despite the impact of the unfavorable winter conditions on sales and customer traffic, we are encouraged by the strength of a number of our non-winter product categories. We look forward to moving beyond this challenging winter and into the spring selling season.”

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 March 23, 2018 to stockholders of record as of March 9, 2018.

Share Repurchases

During the fiscal 2017 fourth quarter, pursuant to its share repurchase program, the company repurchased 118,609 shares of its common stock for a total expenditure of $0.8 million. In fiscal 2017, the company repurchased 795,718 shares of its common stock for a total expenditure of $7.7 million. As of December 31, 2017, the company had $15.7 million available for future repurchases under its $25.0 million share repurchase program.

Guidance

For the fiscal 2018 first quarter, the company expects same-store sales to be in the negative high single-digit range and loss per share to be in the range of $0.06 to $0.14, compared to a same-store sales increase of 7.9 percent and earnings per diluted share of $0.24 in the first quarter of fiscal 2017. Fiscal 2018 first quarter guidance reflects an anticipated small negative impact as a result of the calendar shift of the Easter holiday, during which time the company’s stores are closed, out of the second quarter of fiscal 2017 and into the first quarter of fiscal 2018.

Store Openings

During the fourth quarter of fiscal 2017, the company opened three new stores, including one relocation, ending fiscal 2017 with 435 stores in operation. During the fiscal 2018 first quarter, the company does not anticipate opening or closing any stores. For the fiscal 2018 full year, the company currently anticipates opening approximately eight new stores and closing approximately three stores.

Big 5 is a leading sporting goods retailer in the western United States, operating 435 stores under the “Big 5 Sporting Goods” name as of the fiscal quarter ended December 31, 2017.