For the period ended July 1, the El Segundo, Calif.-based retailer earned a net income of $2.6 million, or 12 cents a share, a decrease of 14.3 percent from $3.1 million, or 14 cents, in the same period a year earlier.
The earnings slide was despite a 3.2 percent increase in net sales to $226.6 million, from $219.6 million. Same-store sales inched up 1 percent, which the firm attributed to the calendar shift of the July 4 holiday further into the third quarter, pushing holiday-related sales later into the year.
Impacting the bottom line were a lower gross profit margin, which slipped 50 basis points to 32.2 percent, reflecting higher store occupancy and distribution costs; and an increase of $1.8 million in selling and administrative expenses.
Meanwhile, analysts were expecting earnings per share of 10 cents on revenue of $227.4 million, as polled by Yahoo Finance.
“Despite continuing to operate in a challenging macroeconomic environment, our business generated growth in same-store sales and merchandise margins and achieved better-than-expected earnings for the second quarter,” said Steven Miller, Big 5’s chairman, president and CEO.
“We experienced the strongest quarterly growth in both our apparel and footwear categories since 2006. Our positive momentum has continued in the third quarter,” Miller added.
Big 5 expects third-quarter same-store sales to grow in the low- to mid-single-digit range, and for EPS to come in between 28 cents and 34 cents.
The company ended the quarter with a cash balance of $6.2 million and debt of $71.4 million.