A strong demand for winter products helped propel Big 5 Sporting Goods Corp. (BGFV) fourth quarter same store sales into positive territory, bucking slow sales trends in the retail sector, and boding well for other outdoor apparel retailers reporting this quarter.
Big 5 Sporting, with 432 stores, said same-stores sales increased more than three percent as profit margins slightly improved. The El Segundo, Calif.-based company reported net income of $0.35 per share, up from $0.20 in the fourth quarter of 2015.
"Our same store sales are up … largely driven by strong demand for winter products as a result of very favorable winter weather conditions throughout most of our Western markets," said Big 5 Sporting Goods CEO Steven G. Miller in a statement. "We also continue to benefit from the competitive store closures."
For the first quarter, Big 5 Sporting expects same store sales to increase in a positive, mid-single digit range with earnings of $0.12 per share to $0.18 per share. That’s improved over a sales decline of 1.9 percent, and a net loss of $0.05 per share in the first quarter of 2015.
"Our fourth quarter benefited from the competitive rationalization in the retail sporting goods sector, and we increased both customer transactions and average sales as well as improved merchandise margins," Miller said. "We also are pleased to have further strengthened our balance sheet."
The positive results are a good sign for Dick’s Sporting Goods Inc. (DKS), which reports March 7. Analysts expect $1.30 per share in earnings, above the $1.13 per share in earnings the company reported last year. Dick’s Sporting shares are down 7.8 percent since the start of the year. (See also, Why Dick’s Sporting Goods Store is Winning)