Big 5 Sporting Goods(US:BGFV)2023-05-03 00:23Financial Data and Key Metrics Changes - Net sales for the first quarter of fiscal 2023 were $224.9 million, down from $242 million in the first quarter of 2022, reflecting a decrease in same-store sales of 7.1% [44][41] - Gross profit for the first quarter was $75.1 million, compared to $85.9 million in the prior year, with a gross profit margin of 33.4%, down from 35.5% [47][44] - Net income for the first quarter was $0.2 million or $0.01 per diluted share, a significant decline from $9.1 million or $0.41 per diluted share in the same period last year [48][44] - EBITDA totaled $4.5 million for the first quarter, compared to $15 million in the first quarter of the previous year [39] Business Line Data and Key Metrics Changes - The apparel category saw an increase in sales in the high single-digit range, driven by winter-related sales [29] - The footwear category experienced a decline in mid-single digits, while hard goods were down in the mid-teens range due to significant rainfall impacting sales [29] Market Data and Key Metrics Changes - Sales in the second quarter are running down approximately 11% compared to the previous year, indicating a soft start to the quarter [5][20] - Transactions for the quarter were down mid-single digits, with the average ticket down low single digits [35] Company Strategy and Development Direction - The company is focused on maintaining strong merchandise margins and managing expenses in a challenging high-inflation environment [46][32] - For fiscal 2023, the company expects to open approximately 5 new stores, relocate 1 store, and close about 5 stores, reflecting ongoing evaluation of store performance [40][25] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic conditions, including the regional bank crisis and lower tax refunds, have impacted consumer spending [4] - The company anticipates same-store sales to decrease in the high single-digit range for the second quarter, reflecting ongoing macroeconomic headwinds [41][5] Other Important Information - Merchandise inventory was up 5.3% year-over-year, primarily due to supply chain disruptions from the previous year [7] - The balance sheet remains strong with zero borrowings under the credit facility and $27.5 million in cash, up $1.9 million from the end of fiscal year 2022 [50] Q&A Session Summary Question: Confirmation of sales decline - Mark Smith confirmed that sales are running down 11% quarter to date, which was affirmed by management [20][21] Question: Impact of weather vs. macro pressures - Management indicated that macro pressures are the overriding factor affecting sales, although weather also played a role [22][23] Question: Concerns about inventory due to weather - Management expressed confidence in their inventory management, particularly regarding baseball products, indicating no concerns about holding inventory [24] Question: Store closures and lease evaluations - Management clarified that the decision to increase store closures from 4 to 5 was based on lease evaluations and optimizing the store base [25]