Big 5's fourth quarter profit misses Street
By Viraj Nair
BANGALORE, March 2 (Reuters) - Big 5 Sporting Goods Corp (BGFV.O) reported a quarterly profit that missed market estimates for the first time in over two years, but forecast a first quarter that could surpass Wall Street targets.
For the first quarter, the El-Segundo California-based sporting goods retailer projected earnings in the range of 17 cents to 23 cents.
Analysts on average were expecting a profit of 18 cents a share for the current quarter, according to Thomson Reuters I/B/E/S.
"We have enjoyed positive sales trends during the first quarter of fiscal 2010 to date, as we have benefited from favorable weather conditions in many of our markets," Big 5's Chief Executive Steven Miller said in a statement.
SunTrust Robinson Humphrey analyst David Magee was encouraged by the company's upbeat forecast for the first quarter.
"I think the business has rebounded nicely from the fourth quarter," he said.
Even though same-store sales quarter till-date have been up in the mid-single digits, the company expects sales at stores open at least a year in the low single-digit range as it expects March to be a challenging month, CEO Miller said on a call with analysts.
The company will lose a day of sales this quarter due to the shift of Easter holiday, when its stores are shut.
However, analyst Magee said the shift in Easter holiday will benefit Big 5 in the second quarter.
Miller said increased promotional activity from rivals in Southern California seems to have slowed down into the first quarter.
"I think the extent of the promotional activities in southern California certainly has some impact on our business, but a whole lot less than the impact we felt from winter weather comparisons," he said.
Larger rival Dick's Sporting's Goods Inc (DKS.N) had increased its promotional activity in Southern California to grow its presence in the market.
Big 5, which operates 384 stores spread over 11 states, also plans to open three new stores during the quarter and will expand into its 12th State when it opens an outlet in Cheyenne, Wyoming on Friday 5 March.
Analyst Magee said the company's store opening plans were more or less in line with his expectations.
Fourth-quarter net income rose to $6.4 million, or 29 cents a share, from $3.6 million, or 17 cents a share a year ago.
Excluding items, the company earned 32 cents a share, below analysts' estimates of 33 cents a share, according to Thomson Reuters I/B/E/S.
As the company previously disclosed, revenue rose 8 percent to $237.6 million.
In January, the company, which has consistently posted profit above Wall Street estimates for the past five quarters, had said unfavorable weather conditions had impacted cold weather products sales for the quarter.
Shares of the Western U.S. retailer closed at $15.64 Tuesday 2 March on Nasdaq. (Reporting by Viraj Nair in Bangalore; Editing by Maju Samuel)