Unfavorable winter weather hurts Big 5's apparel sales
Big 5 Sporting Goods Corporation reported sales results for the fiscal 2011 fourth quarter and full year ended January 1, 2012. For the fiscal 2011 fourth quarter, net sales were $226.7 million, compared to net sales of $226.7 million for fourth quarter of fiscal 2010. Same store sales decreased 2.1% for the fourth quarter of fiscal 2011.
The Company achieved same store sales growth in the low mid-single-digit range through the first half of the quarter. During the second half of the quarter, a lack of winter weather in most of the Company's major markets had a negative effect on sales of winter products, particularly winter apparel, and was a large driver of negative sales trends.
Excluding sales of winter-related products, same store sales for the quarter were slightly positive. The Company's merchandise margins decreased 190 basis points from the fourth quarter of 2010, reflecting the largely anticipated impacts of product cost inflation and increased promotional activities, as well as the sales mix shift away from higher margin winter product categories.
For the fiscal 2011 full year, net sales increased to $902.1 million from $896.8 million for the fiscal 2010 full year. Same store sales decreased 1.2% for the fiscal 2011 full year.
For the fiscal 2011 fourth quarter, the Company now expects to realize earnings per diluted share in the range of $0.02 to $0.05. During the fiscal 2010 fourth quarter, the Company's earnings per diluted share were $0.18, including a net charge of $0.07 per diluted share related to legal matters. For the fiscal 2011 full year, the Company now expects to realize earnings per diluted share in the range of $0.55 to $0.58, compared to earnings per diluted share in the prior year of $0.94, including the net charge of $0.07 per diluted share for legal matters.
"We are disappointed with our fourth quarter sales results, particularly given that same store sales were solidly positive through the first half of the quarter," said Steven G. Miller, the Company's Chairman, President and Chief Executive Officer.
"The holiday selling period was below expectations as our results were heavily impacted by a lack of favorable winter weather in most of our markets and a highly promotional environment. Although sales trends picked up during the week before Christmas, after-Christmas sales were particularly soft, with winter-related product categories significantly underperforming expectations as winter weather conditions grew increasingly unfavorable in our markets.”
“The adverse weather conditions throughout the second half of the quarter negatively impacted sales in all of our major merchandise categories, particularly apparel sales, which comped down mid-single digits for the quarter. Sales in our footwear and hardgoods categories decreased in the low single-digit range. Despite the weaker than anticipated sales, we effectively managed our inventory position, ending the quarter with preliminary per-store inventories up just 2.2% from the prior year, which is significantly improved from the end of the third quarter, when per-store inventories were up 11.4% over the prior year."
The Company expects to issue earnings results for the fiscal 2011 fourth quarter and full year by the end of February.
Big 5 Sporting Goods Corporation