Big Five’s Q4 Hurt By Discounting

Heavy discounting impacted the bottom line at Big 5 Sporting Goods Corporation in the fourth quarter.

The El Segundo, Calif.-based retailer said net sales were flat in the period ended Jan. 1, leading to a slight loss of $9,000, or zero cents a share.

Gross profit margin slipped to 31.2 percent, from 33.4 percent a year ago, reflecting the impact of product cost inflation and increased promotional activities, as well as a mix shift away from higher margin winter product categories due to unfavorable winter weather conditions, the firm said.

Comparatively, net income in the same period a year ago was $4 million, or 18 cents a share, and the firm fell short of analysts’ estimates of 4 cents a share.

“Our fourth quarter performance was impacted by negative same store sales over the second half of the quarter,” said Steven Miller, Big Five’s chairman, president and CEO in a statement. “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 warned that poor winter weather conditions and reduced demand for winter products in most of the firm’s markets continue to impact sales in the first quarter of 2012, but added the firm is focused on refining its merchandise mix and adjusting our promotional and marketing plans to better appeal to consumers.

For the full year, revenue was higher at $902.1 million, compared with $896.8 million, but net income fell to $11.7 million, or 53 cents a share, from $20.6 million, or 94 cents.

Cash and cash equivalents slipped to $4.9 million, from $5.6 million, while long-term debt increased to $63.5 million, from $48.3 million.

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