Big 5 Sporting Goods Corporation Announces Fiscal 2024 Second Quarter Results

EL SEGUNDO, Calif., July 30, 2024 (GLOBE NEWSWIRE) Big 5 Sporting Goods Corporation (Nasdaq: BGFV) (the “Company,” “we,” “our,” “us,” “Big 5”), a leading sporting goods retailer, today reported financial results for the fiscal 2024 second quarter ended June 30, 2024.

“Our second quarter results were consistent with our guidance range, as our customers continue to feel the ongoing and cumulative impact of inflationary pressures on their discretionary spending,” stated Steven G. Miller, the Company’s Chairman, President and Chief Executive Office. “As we battle these sales headwinds, our team remains focused on aspects of the business within our control, including optimization of merchandise margins and managing our expenses and inventory levels. We believe these efforts on the operational front will best position us to generate improved results as the headwinds ease.”

Mr. Miller continued, “Given the uncertainty of the duration of the challenged macroeconomic environment, and our priority of maintaining a healthy balance sheet, we have proactively suspended our dividend to provide added financial flexibility. We remain steadfast in our commitment to maximizing shareholder value and, as we always have, will continue to evaluate opportunities to return value to shareholders.”

Net sales for the fiscal 2024 second quarter were $199.8 million, compared to net sales of $223.6 million for the second quarter of fiscal 2023. Same store sales decreased 9.9% for the second quarter of fiscal 2024, compared to the second quarter of fiscal 2023.

Gross profit for the fiscal 2024 second quarter was $58.7 million, compared to $71.9 million in the second quarter of the prior year. The Company’s gross profit margin was 29.4% in the fiscal 2024 second quarter versus 32.2% in the second quarter of the prior year. The decrease in gross profit margin compared with the prior year primarily reflected higher store occupancy and distribution expense, including costs capitalized into inventory, as a percentage of net sales. The Company’s merchandise margins decreased by 27 basis points year-over-year for the second quarter of fiscal 2024.

Overall selling and administrative expense for the quarter decreased by $0.2 million from the prior year, primarily reflecting lower employee labor and staffing expense and reduced performance-based incentive accruals. As a percentage of net sales, selling and administrative expense was 36.1% in the fiscal 2024 second quarter, compared to 32.4% in the fiscal 2023 second quarter due to the lower sales base.

Net loss for the second quarter of fiscal 2024 was $10.0 million, or $0.46 per basic share. This compares to a net loss of $0.3 million, or $0.01 per basic share in the second quarter of fiscal 2023.

For the 26-week period ended June 30, 2024, net sales were $393.3 million compared to net sales of $448.5 million in the first 26 weeks of last year. Same store sales decreased 11.7% in the first half of fiscal 2024 versus the comparable period last year. Net loss for the first 26 weeks of fiscal 2024 was $18.3 million, or $0.84 per basic share. This compares to a net loss for the first 26 weeks of fiscal 2023 of $0.1 million or $0.00 per basic share.

EBITDA was a negative $8.7 million for the second quarter of fiscal 2024, compared to a positive $4.2 million in the prior year period. For the 26-week period ended June 30, 2024, EBITDA was a negative $15.2 million, compared to positive EBITDA of $8.6 million in the prior year period. EBITDA and Adjusted EBITDA are non-GAAP financial measures. See “Non-GAAP Financial Measures” below for more details and a reconciliation of non-GAAP EBITDA and Adjusted EBITDA to the most comparable GAAP measure, net income.

Balance Sheet
The Company ended the 2024 fiscal second quarter with no borrowings under its credit facility and a cash balance of $4.9 million. This compares to no borrowings under the Company’s credit facility and $5.9 million of cash as of the end of the 2023 fiscal second quarter. Merchandise inventories as of the end of the second quarter decreased by 10.8% compared to the prior year period, reflecting the Company’s efforts to manage inventory levels relative to sales.

Quarterly Cash Dividend
The Company’s Board of Directors has proactively suspended the quarterly cash dividend, in an effort to provide added financial flexibility given the uncertain duration of the current macroeconomic challenges.

Third Quarter Guidance
For the fiscal 2024 third quarter, the Company expects same store sales to decrease in the mid single-digit range compared to the fiscal 2023 third quarter. The Company’s same store sales guidance reflects an expectation that macroeconomic headwinds will continue to impact discretionary consumer spending over the balance of the third quarter. Fiscal 2024 third quarter net loss per basic share is expected in the range of $0.15 to $0.35, which compares to fiscal 2023 third quarter net income per diluted share of $0.08.

Store Openings
The Company currently has 425 stores in operation, reflecting six store closures in the first quarter of 2024 as part of the Company’s ongoing efforts to optimize its store base, and one store opening in the second quarter of 2024. During the remainder of fiscal 2024, the Company expects to open approximately two additional stores and close approximately five additional stores.

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.

Non-GAAP Financial Measures

In addition to reporting our financial results in accordance with generally accepted accounting principles ("GAAP"), we are providing non-GAAP earnings before interest, income tax expense, depreciation and amortization (“EBITDA”) and any other adjustments (“Adjusted EBITDA”). EBITDA and Adjusted EBITDA are not prepared in accordance with GAAP and exclude certain items presented below. We use EBITDA and Adjusted EBITDA internally for forecasting purposes and as factors to evaluate our operating performance. We believe that Adjusted EBITDA provides useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of core operating results and business outlook. While we believe that EBITDA and Adjusted EBITDA can be useful to investors in evaluating our period-to-period operating results, this information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP. In addition, our definition or calculation of these non-GAAP measures may differ from similarly titled measures used by other companies, limiting the usefulness of this financial measure for comparison to other companies. We believe the GAAP measure that is most comparable to non-GAAP EBITDA and Adjusted EBITDA is net income, and a reconciliation of our non-GAAP EBITDA and Adjusted EBITDA to GAAP net income is provided below.

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