Weakness in Big 5 roller shoe product in Q2

01 Aug '08

5 min read

"We achieved meaningful savings ahead of our plan in several major expense areas of our business, including store-level, distribution center, advertising and corporate administrative expense. We continued with our strong inventory management and completed the second quarter with chain-wide product inventories down from the prior year while operating 22 additional stores. On a per-store basis, product inventories were down 6.3% versus the prior year. We have further improved inventory comparisons during the third quarter to date."

Mr. Miller continued, "We believe that we have a solid grasp on the controllable aspects of our business in the current environment and remain committed to our overall business model, including securing quality new store locations, refining our merchandise mix and promotional plans, managing inventory and controlling expenses."

Quarterly Cash Dividend:
The Company's Board of Directors has declared a quarterly cash dividend of $0.09 per share of outstanding common stock, which will be paid on September 15, 2008 to stockholders of record as of August 29, 2008. Based on the current price of the Company's stock, this dividend equates to an annualized dividend yield of approximately 4%.

Share Repurchases:
During the fiscal 2008 second quarter, the Company repurchased 210,474 shares of its common stock for a total expenditure of $1.7 million. As of the end of the fiscal 2008 second quarter, the Company had approximately $15.0 million available for future stock repurchases under its $20.0 million share repurchase program authorized in the fiscal 2007 fourth quarter.

Guidance:
The Company's guidance for the remainder of fiscal 2008 assumes that sales will continue to be impacted by a challenging consumer environment. Based on that assumption, the Company is providing the following guidance:

• For the fiscal 2008 third quarter, a decline in same store sales in the mid-single digit range and earnings per diluted share in the range of $0.14 to $0.20; and

• For the fiscal 2008 full year, a decline in same store sales in the mid-single digit range. Based on the Company's results for the first half of fiscal 2008 and outlook for the second half of the year, the Company now expects earnings per diluted share for the fiscal 2008 full year in the range of $0.60 to $0.80.

A material improvement or decline in the overall consumer environment during the remainder of the year could materially impact the Company's performance relative to this guidance.

Store Openings: The Company opened six new stores during the second quarter of fiscal 2008, including one relocation of a store that was closed after the end of the quarter. The Company ended the second quarter with 370 stores in operation. The Company anticipates opening four new stores during the fiscal 2008 third quarter, and has closed the store that was relocated during the second quarter. The Company anticipates opening approximately 20 new stores, net of relocations and closures, during fiscal 2008.

Big 5 Sporting Goods Corporation

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