Lack of winter wipes out Big 5 earnings

EL SEGUNDO, Calif. — Lack of snowfall throughout most of the major winter sports regions negatively impacted Big 5 Sporting Goods' results in the fourth quarter.

The company reported a net loss for the fourth quarter of fiscal 2011 of $9,000, or 0 cents per diluted share, including the non-cash impairment charge of 5 cents per diluted share. For the fourth quarter of fiscal 2010, net income was $4 million, or 18 cents per diluted share, including a net charge of 7 cents per diluted share related to legal matters.

As the company previously reported, net sales for the fiscal 2011 fourth quarter were $226.7 million, compared to net sales of $226.7 million for the fourth quarter of fiscal 2010. Same-store sales decreased 2.1% for the fourth quarter of fiscal 2011.

"As we previously reported, our fourth quarter performance was impacted by negative same-store sales over the second half of the quarter," said Steven Miller, chairman, president and CEO. "Although same -tore sales were positive over the first half of the quarter, the holiday selling period was below expectations as our results were heavily influenced by a lack of favorable winter weather in most of our markets and a highly promotional environment."

Miller continued, "During the first quarter of 2012, we have continued to experience poor winter weather conditions and reduced demand for winter products in most of our geographic markets. Despite the adverse impact of the weather on our winter product sales, we are encouraged by the positive performance of a number of our other key product categories that have begun to benefit from new merchandise initiatives. We remain focused on refining our merchandise mix and adjusting our promotional and marketing plans to better appeal to today's consumer. We are pleased with the early results of these efforts, and are excited about the potential positive effect on upcoming seasons."

For the fiscal 2011 full year, net sales increased to $902.1 million from net sales of $896.8 million for fiscal 2010. Same-store sales decreased 1.2% in fiscal 2011 from fiscal 2010. Net income in fiscal 2011 was $11.7 million, or 53 cents per diluted share, including non-cash impairment charges of 7 cents per diluted share, compared with net income in fiscal 2010 of $20.6 million, or $0.94 per diluted share, including the net charge of 7 cents per diluted share for legal matters.

For the fiscal 2012 first quarter, Big 5 expects same-store sales in the negative low single-digit range and earnings per diluted share in the range of 0 cents to 6 cents, reflecting anticipated continued pressure on merchandise margins reflecting the impacts of product cost inflation and increased promotional activities, as well as a product sales mix shift away from higher margin winter product categories due to unfavorable winter weather conditions.

The company opened eight new stores during the fourth quarter, bringing its store count at the end of fiscal 2011 to 406 stores from 398 stores at the end of fiscal 2010. During the fiscal 2012 first quarter, the company anticipates opening one new store, which is a relocation of an existing store that is expected to close later in the year. For the fiscal 2012 full year, the company currently anticipates opening approximately ten new stores and relocating approximately seven stores.