Soft demand for firearms and ammo affects Big 5’s first quarter
Reduced demand for firearms, ammunition and related products, as well as weak sales of winter-related products thanks to unseasonably warm and dry conditions in most of the company's western markets affected Big 5 Sporting Goods Corporation’s performance in the first quarter ended March 30.
Net sales were $231.3 million, compared to net sales of $246.3 million for the first quarter of fiscal 2013. Same store sales declined 7.9% for the quarter, compared to a same-store sales increase of 10.5% for the first quarter of fiscal 2013 over the first quarter of the prior year.
Net income for the quarter was $2.1 million, or $0.09 per diluted share, including expenses associated with the development of the company's new e-commerce platform of $0.01 per diluted share, compared to net income of $7.5 million, or $0.34 per diluted share, for the first quarter of fiscal 2013.
"We were encouraged by the strength of our non-firearm and non-winter-related product categories during the quarter,” said chairman, president and CEO Steven G. Miller. “Excluding sales of firearms, ammunition, firearm accessories and winter-related products, the company's same store sales increased in the solid low single-digit range for the period. While current sales trends are somewhat difficult to read given the later timing of Easter this year, sales in the second quarter to-date have been challenged by lower than expected demand for firearms and ammunition products compared to the prior year, as well as what appears to be some softness in our overall consumer environment."
On an optimistic note, Miller added that the company is well positioned from a merchandise and promotional perspective for the key selling period during the quarter, which includes Memorial Day, Father's Day and the start of the summer season.
Look ahead to the second quarter, the company expects same store sales comparisons in the low negative to low positive single-digit range and earnings per diluted share in the range of $0.12 to $0.20. This guidance reflects the continued softness in demand for firearms, ammunition and related products and the negative effect of the calendar shift of the Easter holiday, during which the company's stores are closed, out of the first quarter and into the second quarter this year. In addition, second quarter guidance includes approximately $0.01 per diluted share in anticipated expenses associated with the development of the company's e-commerce platform. For comparative purposes, the company's same store sales increased 4.4% and earnings per diluted share were $0.28 for the second quarter of fiscal 2013.
During the first quarter, the company closed four stores, two of which were part of relocations, and ended the quarter with 425 stores in operation. During the fiscal 2014 second quarter, the company anticipates opening two new stores. For the full year, it anticipates opening approximately 12 to 15 net new stores.