Big 5 Sporting Goods(BGFV) - 2024 Q4 - Annual Report

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]