Shares for Big 5 Sporting Goods Corp. more than doubled in Thursday trading after the retailer posted an upbeat earnings forecast amid the coronavirus outbreak.
The El Segundo, Calif.-based company, whose stock surged upwards of 104% today, predicted second-quarter earnings per share of 52 cents to 54 cents for the period ended June 28, compared with breakeven EPS last year.
As of 2:00 p.m. ET, its shares had spiked more than 50%.
Big 5 also released preliminary results for revenues, which dropped 5.4% to $228 million, and comps, which declined 4.2%. Although same-store sales fell 28.2% in the first half of the quarter, the gradual reopening of its locations across the country have resulted in a 15.5% improvement in the second half of that period.
“We are pleased with our exceptionally strong second-quarter performance that was driven by substantial sales and merchandise margin gains over the back half of the quarter and considerable operating leverage from meaningful reductions in our cost structure,” chairman, president and CEO Steven Miller said in a statement. “This powerful combination has contributed to significantly reduced inventory and net borrowing levels, and our business is in a very strong financial position.”
Starting mid-March, Big 5 began temporarily shuttering a significant portion of its brick-and-mortar fleet to help curb the spread of COVID-19. About a quarter of its locations were closed at the end of April, but it began reopening its doors in limited capacities in May.
Currently, all of the units that were shut down have since reopened for in-store shopping, albeit with social-distancing restrictions and reduced operating hours. (Four of its stores that were closed as a result of “damage incurred in connection with civil unrest” have also opened back up to the public.)
According to Big 5, the positive sales and margin momentum has continued into the start of its third quarter.
What’s more, Miller announced that the retailer would award special bonuses to many of its workers — with the exception of senior executives — due to their “dedicated” COVID-19 response. The company said it would carry out previously planned annual pay increases that were suspended amid pandemic-related uncertainties.
“We are extremely proud of how our team has responded to the challenges imposed by COVID-19 over the last few months,” Miller added. “Although the future impacts of the pandemic remain uncertain, moving forward we are confident that our recent experience will help us to navigate challenges that may arise.”