Big 5 Sporting Goods Corporation reported financial results for the fiscal 2008 third quarter ended September 28, 2008.
For the fiscal 2008 third quarter, net sales were $223.2 million, compared to net sales of $231.3 million for the third quarter of fiscal 2007. Same store sales declined 6.6% for the third quarter, primarily due to a decrease in customer traffic resulting from the continuation of the challenging consumer environment.
Gross profit for the fiscal 2008 third quarter was $74.3 million, compared to $79.4 million in the third quarter of the prior year. The Company's gross profit margin was 33.3% in the fiscal 2008 third quarter versus 34.3% in the third quarter of the prior year.
The Company achieved an 11 basis-point increase in product selling margins and lowered overall distribution center expenses versus the prior year despite operating 19 more stores and experiencing increased freight costs due to higher fuel prices. These benefits were offset by higher store occupancy costs due primarily to an increased store count.
Selling and administrative expense as a percentage of net sales was 29.6% in the fiscal 2008 third quarter versus 27.7% in the third quarter of the prior year, primarily due to lower sales levels and higher store-related expenses reflecting an increased store count.
Net income for the third quarter of fiscal 2008 was $4.5 million, or $0.21 per diluted share, compared to net income of $8.4 million, or $0.37 per diluted share, for the third quarter of fiscal 2007.
For the 39-week period ended September 28, 2008, net sales decreased $21.2 million, or 3.2%, to $645.0 million, from net sales of $666.2 million for the same period last year. Same store sales decreased 6.5% in the first 39 weeks of fiscal 2008 versus the same period last year.
Net income was $10.3 million, or $0.48 per diluted share, for the first 39 weeks of fiscal 2008, compared to net income of $21.9 million, or $0.97 per diluted share, for the same period last year. Results for the first 39 weeks of fiscal 2008 include a one-time pre-tax charge of $1.5 million, or $0.04 per diluted share, in the second quarter to correct an error in the Company's straight-line rent expense, substantially all of which pertained to prior periods.
"We are pleased with the relative strength of our performance in this challenging consumer environment, as we delivered third quarter earnings that exceeded the high end of our guidance," said Steven G. Miller, the Company's Chairman, President and Chief Executive Officer.
"By focusing on managing our inventory and controlling expenses, we continued to mitigate the impact of the difficult macro-economic environment on our sales. We achieved increased efficiencies in our distribution center and reduced total product inventories by 4.9% from the prior year despite operating 19 more stores."
Mr. Miller continued, "While recent events have demonstrated that economic conditions are difficult to forecast and consumer spending is likely to remain soft through the holiday season, we believe that we are well positioned from an operational, promotional and product offering perspective. We are taking the steps that we believe are necessary to weather the current economic turbulence, while continuing to offer a strong value proposition that we believe will resonate with consumers as they evaluate their spending power in today's economy."
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