Big 5 Sporting Goods(BGFV) - 2019 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q2 2019, net sales were $241 million, slightly up from $240 million in the prior year period, with same-store sales increasing by 0.7% [7][21] - The gross profit margin for Q2 2019 was 30.3%, down from 31.4% in Q2 2018, primarily due to an 80-basis point contraction in merchandise margins [19] - Net income for Q2 2019 was $28,000 or $0.00 per diluted share, compared to a net loss of $0.2 million or $0.01 per share in Q2 2018 [21] - Operating cash flow improved to a positive $5.6 million in the first half of fiscal 2019, compared to a negative $21.9 million in the prior year period [26] Business Line Data and Key Metrics Changes - Hardgoods category sales were up low-mid single digits, driven by strong ammunition sales [9] - Apparel category sales were down low-single digits, impacted by soft licensed apparel sales, although excluding licensed apparel, the category comped positively [10] - Footwear category sales were down in the low-mid single-digit range, but trends improved over the quarter [10] Market Data and Key Metrics Changes - The company experienced a slight decrease in customer transactions but a modest increase in average sales compared to the prior year [11] - Sales comparisons were negatively impacted by cooler-than-normal temperatures affecting summer-related products [8] Company Strategy and Development Direction - The company plans to open approximately 4 stores and close about 5 stores in 2019, reflecting efforts to optimize the store base [12] - The focus remains on managing costs, inventory, and other assets to maintain a healthy balance sheet and capitalize on opportunities [17] Management's Comments on Operating Environment and Future Outlook - Management noted that July sales were running down low-single digits compared to the prior year, with expectations for more favorable comparisons later in the quarter [13] - The company is optimistic about promotional plans and inventory positioning to drive positive sales [16] - Management highlighted the importance of mitigating cost pressures and maintaining a favorable SG&A result [17] Other Important Information - The company declared a quarterly cash dividend of $0.05 per share for Q3 2019 [27] - Capital expenditures for fiscal 2019 are expected to be approximately $9 million to $13 million [25] Q&A Session Summary Question: What are the expectations for same-store sales in Q3? - The company expects same-store sales to be in the flat-to-positive low-single-digit range for Q3 2019 [28]