Company Overview - Big 5 Sporting Goods Corporation is a leading sporting goods retailer in the western United States, operating 414 stores under the "Big 5 Sporting Goods" name [4] - The company offers a full-line product offering in a traditional sporting goods store format, averaging 12,000 square feet [4] - Product mix includes athletic shoes, apparel, accessories, and a broad selection of outdoor and athletic equipment for various sports and recreational activities [4] Upcoming Financial Results - The company will announce first quarter fiscal 2025 financial results on April 29, 2025, after market close [1] - A conference call to discuss these results is scheduled for 2:00 p.m. Pacific Time on the same day [2] - The conference call will be accessible via phone and will also be broadcast live on the company's website [3]

Shares of Big 5 Sporting Goods Corporation (BGFV) have declined 17.8% since the company reported its earnings for the quarter ended Dec. 29, 2024. This compares to the S&P 500 index’s decline of 2.2% over the same time frame. Over the past month, the stock has declined 26.7% compared with the S&P 500’s 3.4% decline.See the Zacks Earnings Calendar to stay ahead of market-making news.The company incurred a net loss of 95 cents per share in the fourth quarter of fiscal 2024, wider than a loss of 41 cents per s ...

Financial Performance - Net sales for fiscal 2024 decreased by 10.1% to $795.5 million compared to $884.7 million for fiscal 2023, with a decline of 9.4% in same store sales[149] - Gross profit for fiscal 2024 was $234.5 million, representing 29.5% of net sales, down from 32.3% in fiscal 2023[149] - The net loss for fiscal 2024 was $69.1 million, or $3.15 per basic share, compared to a net loss of $7.1 million, or $0.33 per basic share, for fiscal 2023[149] - Same store sales decreased by $81.0 million, or 9.4%, in fiscal 2024, influenced by inflationary pressures and a reduction in store count[151] - Seasonal fluctuations in net sales and operating results can negatively impact financial performance, particularly in the fourth fiscal quarter[187] Expenses and Cash Flow - Selling and administrative expenses decreased by 2.2% to $290.1 million, or 36.5% of net sales, compared to 33.5% of net sales in fiscal 2023[149] - Operating cash flow for fiscal 2024 was a negative $11.4 million, down from a positive $18.5 million in the prior year[149] - Operating cash flows for fiscal 2024 were a negative $11.4 million, compared to a positive $18.5 million in fiscal 2023[158] - Cash on hand at the end of fiscal 2024 was $5.4 million, down from $9.2 million at the end of fiscal 2023[156] - Cash dividends paid in fiscal 2024 were $0.10 per share, down from $0.875 per share in fiscal 2023, reflecting the suspension of quarterly dividends in the second half of fiscal 2024[162] Store Operations - The company closed 11 stores in fiscal 2024, reducing the total store count to 422 from 430 in fiscal 2023[146] - The company anticipates closing approximately 15 stores in fiscal 2025, with no new store openings planned[146] - Future capital expenditures for fiscal 2025 are expected to range from $4.0 million to $8.0 million, with no new store openings anticipated and approximately 15 store closures planned[171] Capital Expenditures and Investments - Capital expenditures for fiscal 2024 slightly decreased to $10.9 million from $11.0 million in fiscal 2023[149] - Net cash used in investing activities for fiscal 2024 was $10.9 million, slightly down from $11.0 million in fiscal 2023, with capital expenditures primarily for store remodeling and new store openings[159] - Financing cash flows for fiscal 2024 were a positive $18.4 million, a significant improvement from a negative $23.9 million in fiscal 2023, mainly due to borrowings under the credit facility[160] Debt and Credit - As of December 29, 2024, the company had $13.8 million in revolving credit borrowings and $6.1 million in letter of credit commitments, compared to no borrowings and $2.0 million in commitments as of December 31, 2023[161] - The company expects to fund its cash requirements from cash on hand, operating cash flows, and borrowings from its credit facility for at least the next 12 months[172] Inventory and Impairment - Merchandise inventory valuation reserves totaled $2.7 million as of December 29, 2024, representing approximately 1% of merchandise inventory[178] - A 10% change in inventory valuation reserves would result in a change in reserves of $0.3 million and a corresponding change in pre-tax earnings[179] - Impairment charges recognized in fiscal 2024 and 2023 were $0.8 million and $0.6 million, respectively[186] - The company evaluates long-lived assets for impairment based on future undiscounted cash flows over the remaining lease term[182] - Impairment reviews are triggered by operating or cash flow losses combined with a history of such losses[181] Market Conditions and Pricing - Significant inflation in product costs was experienced in fiscal 2023 and 2024, affecting merchandise margins and operating results[188] - The company has generally been able to adjust selling prices in response to higher product purchase costs due to inflation[188] - Management's estimates of future cash flows involve assumptions about sales growth rates and operating performance[183] - Seasonal buying patterns influence merchandise and accounts payable levels, impacting cash flows[187] - The fair value of an ROU asset is determined using discounted cash flow valuation techniques[185] - The estimation of fair value for ROU assets is based on current market rental data from comparable retail locations[185]

Financial Data and Key Metrics Changes - Net sales for Q4 2024 were $181.6 million, down from $196.3 million in the prior year, with same-store sales decreasing by 6.1% [6][18] - Gross profit for Q4 2024 was $51.2 million, compared to $59.2 million in Q4 2023, resulting in a gross profit margin of 28.2%, down from 30.2% [15][17] - The net loss for Q4 2024 was $20.9 million or $0.95 per basic share, compared to a net loss of $8.9 million or $0.41 per basic share in Q4 2023 [17][19] - Adjusted EBITDA was negative $16.4 million in Q4 2024, compared to negative $8.7 million in the same quarter last year [18] Business Line Data and Key Metrics Changes - On a same-store basis, apparel sales declined by 1.3%, footwear by 5.4%, and hard goods by 8.7% [8] - Average sale decreased by 2.3%, while transactions were down by 3.8% [8] Market Data and Key Metrics Changes - The company faced macroeconomic headwinds affecting consumer discretionary spending, with winter-related product sales being particularly soft due to unfavorable weather conditions [7][12] - Southern markets experienced below-normal snowfall, impacting winter product sales [13] Company Strategy and Development Direction - The company plans to close 15 stores in fiscal 2025, having already closed eight locations in the first quarter, to focus resources on more productive stores [11] - Capital expenditures for fiscal 2024 were $10.9 million, with expectations for $4 million to $8 million in fiscal 2025, primarily for store-related remodeling [20] Management's Comments on Operating Environment and Future Outlook - Management indicated that sales trends remain challenged, with no improvement in macroeconomic conditions expected in the near term [12][23] - For Q1 2025, same-store sales are expected to decline in the mid to high single-digit range compared to Q1 2024 [23] Other Important Information - Merchandise inventory at the end of Q4 2024 decreased by 5.6% year-over-year, reflecting efforts to align inventory levels with sales [20] - The company amended and extended its $150 million credit agreement with Bank of America, providing financial flexibility [22] Q&A Session Summary Question: What are the expectations for same-store sales in the upcoming quarter? - Management expects same-store sales to decline in the mid to high single-digit range due to ongoing macroeconomic headwinds [23] Question: How is the company managing its inventory levels? - The company has successfully reduced inventory by 5.6% year-over-year to better align with sales [20] Question: What is the outlook for the winter business? - The winter business remains soft, particularly in southern markets, but spring-related activities are anticipated to drive business as the season transitions [12][13]

Sales Results - Big 5 Sporting Goods Corporation reported sales results for fiscal 2024 fourth quarter and full year ended December 29, 2024[4]. Earnings Guidance - The updated earnings guidance for fiscal 2024 fourth quarter and full year was provided in the press release[4]. Press Release Information - The press release is furnished as Exhibit 99.1 to the Current Report on Form 8-K[4].

Core Viewpoint - Big 5 Sporting Goods Corporation reported a significant decline in net sales and increased net losses for both the fourth quarter and full year of fiscal 2024, reflecting ongoing challenges in the retail environment and macroeconomic pressures on discretionary spending [1][6]. Financial Performance - For the fourth quarter of fiscal 2024, net sales were $181.6 million, down from $196.3 million in the same quarter of fiscal 2023, representing a decrease of 6.1% in same store sales [2][6]. - Gross profit for the fourth quarter was $51.2 million, compared to $59.2 million in the prior year, with a gross profit margin of 28.2%, down from 30.2% year-over-year [3]. - The overall selling and administrative expense decreased by $1.0 million, but as a percentage of net sales, it increased to 39.3% from 36.9% due to lower sales [4]. - The net loss for the fourth quarter was $20.9 million, or $0.95 per basic share, compared to a net loss of $8.9 million, or $0.41 per basic share in the fourth quarter of fiscal 2023 [5]. - For the full year of fiscal 2024, net sales totaled $795.5 million, down from $884.7 million in fiscal 2023, with a full-year net loss of $69.1 million, or $3.15 per basic share [6]. Adjusted EBITDA - Adjusted EBITDA for the fourth quarter was a negative $16.4 million, compared to a negative $8.7 million in the prior year, while for the full year, it was a negative $36.7 million, down from a positive $7.3 million in fiscal 2023 [7]. Operational Insights - The company experienced challenging sales trends in the first quarter of fiscal 2025, attributed to macroeconomic headwinds and unfavorable weather patterns [8]. - As of December 2024, the company had $13.8 million in borrowings under its credit facility and a cash balance of $5.4 million, with merchandise inventories decreasing by 5.6% compared to the prior year [9]. Future Guidance - For the first quarter of fiscal 2025, the company expects same store sales to decline in the mid to high single-digit range compared to the first quarter of fiscal 2024, with anticipated net loss per basic share in the range of $0.75 to $0.85 [10][11]. - The company plans to close approximately seven additional stores during fiscal 2025, following eight closures in the first quarter [12].

Core Viewpoint - Big 5 Sporting Goods Corporation will announce its fourth quarter and full year fiscal 2024 financial results on February 25, 2025, after market close [1] Group 1: Financial Results Announcement - The financial results announcement is scheduled for February 25, 2025, after market close [1] - A conference call will be held on the same day at 2:00 p.m. Pacific Time to discuss the results [2] - Participants can access the conference call via specific phone numbers for North America and international callers [2] Group 2: Conference Call Access - The conference call will be available for live streaming on the Company's website, under the "Investor Relations" section [3] - The webcast will be archived for 30 days post-call, and a telephonic replay will be available until March 4, 2025 [3] Group 3: Company Overview - Big 5 operates 414 stores in the western United States, offering a full-line product range in a traditional sporting goods store format averaging 12,000 square feet [4] - The product mix includes athletic shoes, apparel, accessories, and a wide selection of outdoor and athletic equipment for various sports and recreational activities [4]

Core Insights - Big 5 Sporting Goods Corporation reported a decline in net sales for both the fourth quarter and full year of fiscal 2024, attributed to weaker winter product sales due to warmer weather conditions [2][3] - The company anticipates reporting a loss per basic share for the fourth quarter in the range of $0.94 to $0.97, which is an update from previous guidance [4] - For the full year, the expected loss per basic share is projected to be between $3.14 and $3.17, including a non-cash charge related to deferred tax assets [5] Financial Performance - For the fiscal 2024 fourth quarter, net sales were $181.6 million, down from $196.3 million in the same quarter of fiscal 2023, with same store sales decreasing by 6.1% [2] - For the full year of fiscal 2024, net sales totaled $795.5 million, compared to $884.7 million in fiscal 2023, with same store sales down 9.4% [3] - Merchandise margins decreased by 23 basis points in the fourth quarter and 34 basis points for the full year compared to the prior periods [2][3] Cash Position and Borrowings - At the end of fiscal 2024, the company had a cash balance of $5.4 million and borrowings of $13.8 million under a $150 million credit facility with Bank of America [6] - Merchandise inventories decreased by 4.1% compared to the end of the previous fiscal year [6] Company Overview - Big 5 operates 418 stores in the western United States, offering a full-line product range in a traditional sporting goods store format averaging 12,000 square feet [7]

Core Viewpoint - Big 5 Sporting Goods Corporation has entered into an agreement to amend and extend its credit facility with Bank of America, which is expected to provide financial flexibility in the current retail environment and for long-term operations [1][2]. Financial Agreement Details - The new Loan Agreement has a five-year term maturing in December 2029 and includes a secured revolving credit facility with committed availability of up to $150 million [2]. - The Company can request additional increases in availability of up to $50 million, leading to a total potential availability of $200 million [2]. - Interest on loans will be based on SOFR rates or a specified base rate, with margins ranging from 1.75% to 2.125% for SOFR loans and 0.75% to 1.125% for base rate loans, subject to interest rate floors of zero [2]. Company Overview - Big 5 operates 422 stores in the western United States, offering a full-line product mix including athletic shoes, apparel, accessories, and outdoor and athletic equipment [4]. - The average store size is approximately 12,000 square feet, catering to various sports and recreational activities [4].

Core Viewpoint - Zacks Investment Research has initiated coverage of Big 5 Sporting Goods Corporation (BGFV) with an "Underperform" rating, highlighting various financial and operational challenges that may affect the company's long-term outlook [1] Financial Performance - Big 5's sales have decreased by 10.8% in the first nine months of 2024, primarily due to ongoing inflation impacting consumer spending on non-essential items [2] - Same-store sales fell by 10.2%, and gross profit margins declined from 32.9% to 29.9% as a result of aggressive discounting strategies aimed at attracting price-sensitive customers [2] Operational Challenges - Rising store occupancy and distribution expenses increased by $4.1 million in the first nine months of 2024, which diminishes Big 5's operational flexibility amid declining sales [3] - The competitive landscape has shifted, with digital-first and omnichannel players gaining market share, putting Big 5 at a disadvantage due to its traditional retail model and limited e-commerce presence [4] Strategic Responses - In response to these challenges, Big 5 has implemented cost-control measures, including an 8.7% reduction in inventory and plans to close 11 stores by year-end [5] - However, these measures may restrict revenue potential if demand unexpectedly rebounds, and the company's cash reserves have dwindled to $4 million as of September 29, 2024, indicating financial strain [5] Competitive Position - Despite the pressures, Big 5's strong regional presence in the Western United States provides a competitive edge, particularly in areas with steady demand for outdoor activities and recreational sports [6] - The company has an extensive supplier network of over 600 vendors, allowing for sourcing flexibility and reducing reliance on any single supplier [6] Market Sentiment - Big 5's share price has significantly declined, reflecting investor concerns regarding the company's ability to navigate a competitive and inflationary environment [7] - The stock's valuation is notably below that of industry peers, indicating that the market has largely accounted for the company's operational challenges and limited growth potential [7] Future Outlook - The combination of declining sales, margin erosion, rising operational costs, intensified competition, and liquidity constraints presents substantial challenges for Big 5's future performance [8] - While the company's strong brand presence and focus on seasonal demand offer some resilience, the underlying risks suggest a potentially difficult path ahead [8]