Big 5 Sporting Goods(US:BGFV)2022-03-01 23:38Financial Data and Key Metrics Changes - The company reported net sales of $273.4 million for Q4 2021, a decrease from $290.6 million in Q4 2020, attributed to one less week in the fiscal calendar [8][19] - Same-store sales increased by 0.2% in Q4 2021 compared to Q4 2020 and by 10.6% compared to Q4 2019 [9][19] - Gross profit for Q4 2021 was $103 million, with a gross profit margin of 37.7%, up from 35.2% in Q4 2020 [20] - Net income for Q4 2021 was $19.9 million, or $0.89 per diluted share, compared to $21 million, or $0.95 per diluted share in Q4 2020 [22][23] - Full year net sales reached a record $1.16 billion, up from $1.04 billion in the previous year, with a same-store sales increase of 13.9% [23] Business Line Data and Key Metrics Changes - Apparel and footwear categories showed double-digit growth compared to the previous year, while hard goods declined low double digits [11] - Merchandise margins increased by 194 basis points compared to Q4 2020 and by 437 basis points compared to Q4 2019 [12] Market Data and Key Metrics Changes - Monthly sales trends were mixed, with October showing slight growth, November declining due to warm weather and supply chain issues, and December rebounding with mid-single-digit growth [10] Company Strategy and Development Direction - The company announced a new stock repurchase authorization of $25 million, reflecting a commitment to returning capital to shareholders [7][29] - The company plans to open approximately six new stores and close two in fiscal 2022, indicating a controlled growth strategy [26][42] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as supply chain disruptions and labor pressures but expressed confidence in the company's ability to adapt and thrive [32] - For Q1 2022, the company expects same-store sales to decrease by 10% to 13%, with earnings per diluted share projected between $0.30 and $0.40 [30] Other Important Information - The company ended fiscal 2021 with zero borrowings and a cash balance of $97.4 million, an increase from $64.7 million at the end of fiscal 2020 [28] Q&A Session Summary Question: Can you walk through what's implied in your guidance regarding gross profit margins for Q1? - Management discussed the impact of merchandise margins and labor pressures on distribution costs, indicating challenges in leveraging distribution costs in Q1 [34][36] Question: How should we think about merchandise margins for the remainder of the year? - Management believes they can maintain merchandise margins significantly above pre-pandemic levels due to changes in their advertising model and supply-demand dynamics [38][39] Question: Are there opportunities for more store expansion beyond 2022? - Management confirmed they are evaluating opportunities for store growth, focusing on both infill and new market opportunities [41][42] Question: Will share repurchase be prioritized over special dividends? - Management indicated that share repurchase remains opportunistic, and dividends are still an important part of their strategy [43]