Big 5 Sporting Goods Corporation Announces Fiscal 2023 Fourth Quarter and Full Year Sales Results and Update of Earnings Guidance
- None.
- Decrease in net sales for the fiscal 2023 fourth quarter and full year
- Significant decrease in same store sales
- Expected loss per basic share for the fiscal 2023 fourth quarter and full year
The financial performance of Big 5 Sporting Goods Corporation reflects a notable downturn in the fiscal 2023 fourth quarter, with a 17.7% drop in same store sales and a decrease in net sales from $238.3 million to $196.3 million compared to the same period in the previous year. This downturn is significant as same store sales are a critical indicator of a retailer's health, suggesting a decrease in consumer spending power or shifts in consumer preferences within Big 5's market. The reported loss per basic share of $0.38 to $0.40, which is worse than the previously guided range, indicates a challenging quarter for the company and potentially a negative impact on investor sentiment.
The company's ability to maintain merchandise margins despite these sales challenges shows some resilience in pricing power. However, the 43 basis points decrease in merchandise margins may signal an underlying pressure to discount in order to stimulate sales. The lack of debt and a solid cash balance provide some financial stability, yet the reduction in total merchandise inventories by 7.8% could be interpreted as a cautious approach to demand forecasting or a strategic inventory management response to slower sales.
The external factor of unfavorable winter weather conditions has had a significant impact on Big 5's sales, particularly in the winter-related products category, which saw a nearly 40% decline. This underscores the vulnerability of businesses reliant on seasonal merchandise to climate variability. The broader decline in non-winter product sales by approximately 10% suggests that the company may also be facing competitive pressures or a broader downturn in consumer discretionary spending.
Looking ahead, Big 5’s strategic focus on maintaining strong merchandise margins and managing inventory and expenses will be crucial in navigating the dynamic retail environment. The company's position with no debt provides flexibility, but it will be important to monitor how Big 5 adapts its product mix and marketing strategies to respond to changing consumer behaviors and preferences in the sporting goods sector.
Big 5 Sporting Goods Corporation's performance highlights the challenges facing brick-and-mortar retailers in the sporting goods industry. The significant decrease in same store sales points to issues beyond weather-related disruptions, potentially including increased online competition and changes in consumer spending habits. The company's focus on inventory and expense management is a common strategy among retailers to improve operational efficiency and protect profit margins during periods of reduced sales.
The sporting goods industry is highly competitive and Big 5's ability to navigate a dynamic environment without the burden of debt is an advantage. However, the company will need to innovate and possibly diversify its product offerings to mitigate the impact of seasonal fluctuations and attract a broader customer base. The flat merchandise margins for the full year indicate that while the company has not succumbed to deep discounting, it has also not been able to increase its profitability through pricing strategies, which is an area that may require further strategic focus.
EL SEGUNDO, Calif., Jan. 16, 2024 (GLOBE NEWSWIRE) -- Big 5 Sporting Goods Corporation (Nasdaq: BGFV) (the “Company,” “we,” “our,” “us,” “Big 5”), a leading sporting goods retailer, today reported sales results for the fiscal 2023 fourth quarter and full year ended December 31, 2023.
For the fiscal 2023 fourth quarter, net sales were
“Our fourth quarter results were challenged by extraordinarily unfavorable winter weather conditions across our western footprint,” said Steven G. Miller, the Company’s Chairman, President and Chief Executive Officer. “Winter-related products are typically an important seasonal driver of our fourth quarter business, but this year’s warm weather and lack of snow weighed heavily on the category’s performance, which was down nearly
For the fiscal 2023 full year, net sales were
For the fiscal 2023 fourth quarter, the Company now expects to report a loss per basic share in the range of
The Company ended the 2023 fiscal year with no borrowings under its credit facility and with a cash balance of
The Company expects to issue earnings results for the fiscal 2023 fourth quarter and full year in late February 2024.
About Big 5 Sporting Goods Corporation
Big 5 is a leading sporting goods retailer in the western United States, currently operating 425 stores under the “Big 5 Sporting Goods” name. Big 5 provides a full-line product offering in a traditional sporting goods store format that averages 12,000 square feet. Big 5’s product mix includes athletic shoes, apparel and accessories, as well as a broad selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, home recreation, tennis, golf, and winter and summer recreation.
Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause Big 5’s actual results in current or future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, the economic impacts of COVID-19, including any potential variants, on Big 5’s business operations, including as a result of regulations that may be issued in response to COVID-19, global supply chain disruptions resulting from the ongoing conflict in Ukraine, changes in the consumer spending environment, fluctuations in consumer holiday spending patterns, increased competition from e-commerce retailers, breach of data security or other unauthorized disclosure of sensitive personal or confidential information, the competitive environment in the sporting goods industry in general and in Big 5’s specific market areas, inflation, product availability and growth opportunities, changes in the current market for (or regulation of) firearm-related products, a reduction or loss of product from a key supplier, disruption in product flow, seasonal fluctuations, weather conditions, changes in cost of goods, operating expense fluctuations, increases in labor and benefit-related expense, changes in laws or regulations, including those related to tariffs and duties, as well as environmental, social and governance issues, public health issues (including those caused by COVID-19 or any potential variants), impacts from civil unrest or widespread vandalism, lower than expected profitability of Big 5’s e-commerce platform or cannibalization of sales from Big 5’s existing store base which could occur as a result of operating the e-commerce platform, litigation risks, stockholder campaigns and proxy contests, risks related to Big 5’s historically leveraged financial condition, changes in interest rates, credit availability, higher expense associated with sources of credit resulting from uncertainty in financial markets and economic conditions in general. Those and other risks and uncertainties are more fully described in Big 5’s filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Big 5 conducts its business in a highly competitive and rapidly changing environment. Accordingly, new risk factors may arise. It is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on Big 5’s business or the extent to which any individual risk factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Big 5 undertakes no obligation to revise or update any forward-looking statement that may be made from time to time by it or on its behalf.
Contact:
Big 5 Sporting Goods Corporation
Barry Emerson
Executive Vice President and Chief Financial Officer
(310) 536-0611
ICR, Inc.
Jeff Sonnek
Managing Director
(646) 277-1263
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