Big 5 Sporting Goods Corporation, a leading sporting goods retailer, reported financial results for the fiscal 2011 third quarter and nine months ended October 2, 2011.
For the fiscal 2011 third quarter, net sales were $234.7 million, compared to net sales of $231.8 million for the third quarter of fiscal 2010. Same store sales decreased 0.1% for the third quarter of 2011 versus the comparable period last year, when same store sales increased 2.0% over the prior year. Sales results reflect continued weakness in the consumer environment, which contributed to a decrease in customer traffic, partially offset by an increase in the average sales ticket.
Gross profit for the fiscal 2011 third quarter was $77.0 million, compared to $77.4 million in the third quarter of the prior year. The Company's gross profit margin was 32.8% in the fiscal 2011 third quarter versus 33.4% in the third quarter of last year. The decrease in gross profit margin primarily resulted from a decline of 40 basis points in merchandise margins, reflecting the impact of promotional activities and product cost inflation.
Selling and administrative expense as a percentage of net sales was 28.8% in the fiscal 2011 third quarter versus 28.6% in the third quarter of the prior year. Overall selling and administrative expense increased $1.2 million during the quarter from the prior year due primarily to an increase in store-related expenses as a result of new store openings.
Net income for the third quarter of fiscal 2011 was $5.8 million, or $0.27 per diluted share, versus net income of $6.8 million, or $0.31 per diluted share, for the third quarter of fiscal 2010.
For the 39-week period ended October 2, 2011, net sales were $675.4 million compared to net sales of $670.1 million in the 39 weeks ended October 3, 2010. Same store sales decreased 0.9% in the first 39 weeks of fiscal 2011 versus the comparable period last year.
Net income was $11.7 million, or $0.53 per diluted share, including a $0.02 non-cash impairment charge, for the first 39 weeks of fiscal 2011, compared to net income of $16.6 million, or $0.76 per diluted share, for the first 39 weeks of last year.
"We are pleased to have exceeded our earnings guidance for the third quarter," said Steven G. Miller, the Company's Chairman, President and Chief Executive Officer. "The earnings upside was driven by better than expected merchandise margins and favorable operating expenses.
After a soft start to the quarter that we believe was largely attributable to unfavorable weather conditions in many of our markets, sales trends improved during August and September and we comped up in the low single-digit range over the back half of the quarter. We produced positive same store sales in both our apparel and footwear categories for the quarter, while our hardgoods category comped slightly down."
Mr. Miller continued, "While we are pleased to report that positive sales trends have continued into the fourth quarter, we should note that consumer spending during the upcoming holiday season remains highly unpredictable. We are encouraged by our new merchandise and marketing initiatives and remain focused on identifying opportunities to broaden the reach of both our product and customer base."
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