Outdoor & fitness financials: Big 5 reports slightly higher 1Q results, plus Wolverine declares dividend

Big 5 Sporting Goods reports 1Q earnings up slightly but net income down. Wolverine board declares dividend.
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Big 5 Sporting Goods reports 1Q earnings up slightly but net income down

Big 5 Sporting Goods (Nasdaq:BGFV) reported that 1Q sales and profits were up, but at the lower end of the company’s guidance due to “macroeconomic weaknesses” in the markets the retailer does business.

Overall, net sales were $221.1 million, compared to net sales of $218.5 million for the first quarter of fiscal 2010. Same store sales decreased 0.9 percent for the first quarter of 2011 compared to 1Q in 2010. Sales results in fiscal 2011 reflect a benefit over the prior year from the calendar shift of the Easter holiday, during which Big 5 Sporting Goods stores are closed, out of the first quarter and into the second quarter this year.

Gross profit for the fiscal 2011 first quarter was $72.2 million, compared to $71.6 million in the first quarter of the prior year. The company's gross profit margin was 32.6 percent in the fiscal 2011 first quarter versus 32.7 percent in the first quarter of 2010. The slight gross profit margin decrease reflects an increase in store occupancy costs related to new store openings, partially offset by an increase in merchandise margins of 12 basis points.

During the first quarter of fiscal 2011, Big 5 relocated two stores and ended 1Q 2011with 396 stores. The company anticipates closing one store during the 2Q 2011 as part of a relocation that began in late 2010. Excluding stores closed as part of relocations that began last year, Big 5 currently expects to open between 10 and 15 new stores during 2011.

Net income for the first quarter of fiscal 2011 was $2.8 million, or $0.13 per diluted share, compared to net income of $5.0 million, or $0.23 per diluted share, for the first quarter of fiscal 2010.

"Our sales results for the first quarter were at the lower end of our guidance range and reflect continued macroeconomic weakness in our markets," said Steven G. Miller, Big 5’s chairman, president and chief executive officer. "Sales were negatively impacted by a decrease in customer traffic, as we believe many of our consumers reduced purchases of discretionary items in response to the challenging economic environment, characterized by rising gas prices and high unemployment. Earnings were lower than our previous expectations primarily due to higher than anticipated expenses associated with employee benefits, including workers' compensation, health and welfare and California unemployment taxes.

"Sales trends in the second quarter to-date remain challenging as we believe that our consumer continues to be highly sensitive to the adverse economic conditions prevalent in our markets, which are concentrated in the western United States. We continue to look at all aspects of our business in order to drive sales and earnings," he said.

Big 5’ declared a quarterly cash dividend of $0.075 per share of outstanding common stock, which will be paid on June 15, 2011 to stockholders of record as of June 1, 2011.

Looking ahead to 2Q 2011, Big 5 reported that it expects same store sales in the flat to negative low single-digit range and earnings per diluted share in the range of $0.06 to $0.14. For comparative purposes, Big 5’s earnings per diluted share for the second quarter of fiscal 2010 were $0.22.

Wolverine World Wide, Inc. Declares Quarterly Dividend

Directors of Wolverine World Wide, Inc. (NYSE: WWW), parent company of Merrell and Chaco, have declared a quarterly cash dividend of $0.12 per share of common stock. The dividend is payable on August 1, 2011, to stockholders of record on July 1, 2011. The dividend is equal to the last quarterly dividend and reflects an indicated annual dividend of $0.48 per share.

-- compiled by Michael Hodgson

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