Big 5 Sporting Goods Corporation Announces Fiscal 2024 Third Quarter Results

EL SEGUNDO, Calif., Oct. 29, 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 third quarter ended September 29, 2024.

“Our third quarter performance reflected the impact of ongoing economic pressures on consumer discretionary spending,” commented Steven G. Miller, Chairman, President and CEO. “Despite these challenges, we’re encouraged by the fact that we have seen sequential improvement in same store sales each quarter this year and we continue to see that trend early in the fourth quarter as well. With this positive trajectory in our sales and our enhanced promotional plans and product assortment, we are optimistic about the potential of the approaching holiday season. That said, we are mindful of how inflation continues to strain consumers’ budgets and of the multitude of distractions that are impacting consumer purchasing decisions in the near-term. Throughout this prolonged period of uncertainty, we have been steadfast in our commitment to inventory management and cost control, which we believe has fortified our ability to navigate ongoing market conditions while creating opportunities to capitalize on any favorable macroeconomic shifts.”

Net sales for the fiscal 2024 third quarter were $220.6 million, compared to net sales of $239.9 million for the third quarter of fiscal 2023. Same store sales decreased 7.5% for the third quarter of fiscal 2024, compared to the third quarter of fiscal 2023.

Gross profit for the fiscal 2024 third quarter was $64.2 million, compared to $79.6 million in the third quarter of the prior year. The Company’s gross profit margin was 29.1% in the fiscal 2024 third quarter versus 33.2% in the third quarter of the prior year. The decrease in gross profit margin compared with the prior year primarily reflected lower merchandise margins, which declined 119 basis points year-over-year, along with higher store occupancy and distribution expense, including costs capitalized into inventory, as a percentage of net sales in the third quarter of fiscal 2024.

Overall selling and administrative expense for the quarter decreased by $1.6 million from the prior year, primarily reflecting lower legal expense and reduced performance-based incentive accruals. As a percentage of net sales, selling and administrative expense was 34.0% in the fiscal 2024 third quarter, compared to 31.9% in the fiscal 2023 third quarter due to the lower sales base.

Net loss for the third quarter of fiscal 2024 was $29.9 million, or $1.36 per basic share, and included a non-cash charge for the establishment of a valuation allowance related to deferred tax assets of $21.8 million, or $0.99 per basic share, as well as a non-cash store asset impairment charge of $0.7 million, or $0.03 per basic share. This compares to net income of $1.9 million, or $0.08 per diluted share in the third quarter of fiscal 2023.

For the 39-week period ended September 29, 2024, net sales were $613.8 million compared to net sales of $688.4 million in the first 39 weeks of last year. Same store sales decreased 10.2% in the first nine months of fiscal 2024 versus the comparable period last year. Net loss for the first 39 weeks of fiscal 2024 was $48.2 million, or $2.20 per basic share, including the non-cash charges discussed above. This compares to net income for the first 39 weeks of fiscal 2023 of $1.8 million, or $0.08 per diluted share.

Adjusted EBITDA was a negative $5.1 million for the third quarter of fiscal 2024, compared to a positive $7.4 million in the prior year period. For the 39-week period ended September 29, 2024, Adjusted EBITDA was a negative $20.3 million, compared to a positive $16.0 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 third quarter with no borrowings under its credit facility and a cash balance of $4.0 million. This compares to no borrowings under the Company’s credit facility and $17.9 million of cash as of the end of the 2023 fiscal third quarter. Merchandise inventories as of the end of the third quarter decreased by 8.7% compared to the prior year period, reflecting the Company’s efforts to manage inventory levels relative to sales.

Fourth Quarter Guidance
For the fiscal 2024 fourth quarter, the Company expects same store sales in the range of positive low single digits to negative low single digits compared to the fiscal 2023 fourth 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 fourth quarter. Guidance also anticipates that the Company will benefit from winter weather normalizing relative to last year when our winter product sales were down nearly 40% over the prior year period, as extraordinarily unfavorable winter weather conditions across the Company’s markets weighed heavily on the category’s performance. In connection with the Company’s establishment of a valuation allowance in the fiscal 2024 third quarter related to deferred tax assets, the Company does not anticipate realizing any income tax benefit in the fiscal 2024 fourth quarter, which will result in a tax provision of approximately zero for the quarter. On this basis, the Company expects fiscal 2024 fourth quarter net loss per basic share in the range of $0.80 to $1.05. For prior period comparison purposes, assuming an estimated effective tax rate of 26.3%, the Company expects fiscal 2024 fourth quarter adjusted net loss per basic share in the range of $0.59 to $0.77, which compares to fiscal 2023 fourth quarter net loss per basic share of $0.41, which was not impacted by the deferred tax asset valuation allowance.

Store Openings
The Company currently has 423 stores in operation, reflecting six store closures in the 2024 first quarter, two store closures in the 2024 third quarter, and two store closures in the 2024 fourth quarter to date as part of the Company’s ongoing efforts to optimize its store base, as well as one store opening in the 2024 second quarter, one store opening in the 2024 third quarter, and one store opening in the 2024 fourth quarter to date. During the remainder of fiscal 2024, the Company expects to close approximately one additional store.

About Big 5 Sporting Goods Corporation

Big 5 is a leading sporting goods retailer in the western United States, currently operating 423 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.

FINANCIAL TABLES FOLLOW