Big 5 Sporting Goods Earnings: Here’s Why Investors are Not Excited Now

Big 5 Sporting Goods Corp. (NASDAQ:BGFV) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 11.74%.

Big 5 Sporting Goods Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 133.33% to $0.28 in the quarter versus EPS of $0.12 in the year-earlier quarter.

Revenue: Rose 5.86% to $239.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Big 5 Sporting Goods Corp. reported adjusted EPS income of $0.28 per share. By that measure, the company beat the mean analyst estimate of $0.26. It missed the average revenue estimate of $243.68 million.

Quoting Management: “We are pleased with our second quarter financial results as we continued to see the underlying performance of our business strengthen,” said Steven G. Miller, the Company’s Chairman, President and Chief Executive Officer. “We experienced a slight improvement in customer traffic and a mid-single-digit increase in average sale, and our same store sales improved for each of our major product categories of apparel, footwear and hardgoods. We improved merchandise margins for the quarter and also maintained our cost discipline, which allowed us to continue to leverage expenses, expand operating margins and drive a strong earnings performance. We also reduced per-store inventory levels and used our strong cash flow to invest in our store base, pay our dividend and meaningfully lower our debt versus the prior year.”

Key Stats (on next page)…

Revenue decreased 2.59% from $246.27 million in the previous quarter. EPS decreased 17.65% from $0.34 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.44 to a profit $0.45. For the current year, the average estimate has moved up from a profit of $1.26 to a profit of $1.30 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)