Huge 5 Sporting Items Inventory is a Huge Cut price Right here

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sporting goods retailer Big 5 Sporting Goods (NASDAQ:BGFV) Stocks have fallen from their post-pandemic highs (-60%) as benchmark indices fell. Shares in the pandemic benefactor are starting to rally, although they have lost some momentum on pent-up demand fueled by the reopening phase. The last quarter was marked by supply chain disruptions and inflationary cost pressures. While same-store sales were down (-12%) compared to Q4 2020, they were still improving in the pre-pandemic 2019 period. Margins for athletic apparel and footwear and merchandise improved 437 basis points (bp) in the pre-pandemic period. Big 5 announced a new $25 million stock repurchase program, in addition to a $0.25 quarterly dividend upon the earnings release. Shares are selling at a 6x bargain price as short interest rates are up over 40% of their free float as of March 15, 2022. This creates a potentially explosive short squeeze situation with a tiny free float of 21 million shares. Prudent investors looking for a cheap entry point into the sporting goods space can watch for opportunistic declines in the Big 5 sporting goods stocks.

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Results release Q4 fiscal year 2021

On March 1, 2022, Big 5 reported its fourth quarter 2021 fiscal year 2021 results for the quarter ended December 2021. The company reported earnings per share (EPS) of $0.89, beating estimates by $0.04. Revenue fell (-5.9%) year-on-year (YoY) to $273.40 million. It reported full-year earnings per share of $4.55 for fiscal 2021. The company ended the year with $97.4 million in cash and cash equivalents and no debt while declaring a quarterly cash dividend of $0.25. Steven Miller, CEO of Big 5, commented, “Our performance in the fourth quarter capped a second consecutive record year of sales and earnings. In addition to strong top line performance, our 2021 results were driven by the continued expansion of our merchandise margins, reflecting robust consumer demand, a constrained supply chain and a reduction in our promotions compared to pre-pandemic times. With our strong earnings performance throughout 2021, we have improved our balance sheet while returning more than $69 million of capital to shareholders through dividends and share repurchases.”

Conference call takeaways

CEO Steve Miller noted that the company has returned over $69 million in capital to shareholders through dividends and share repurchases. The company also announced a new $25 million stock repurchase program. Same-store sales grew 0.2% year-on-year in Q4 2021, up 10.6% from pre-pandemic levels in Q4 2019. November was the weakest month in the fourth quarter due to unseasonably warm weather and supply chain disruption. CEO Miller saw relative strength in apparel and footwear, which posted double-digit year-over-year gains. Hard goods declined in the low double digits. He noted that apparel and footwear were the hardest hit during the pandemic, while hard goods saw a 40% increase compared to 2019, driven by pandemic demand for outdoor recreation and home gym products. Merchandise margin increased 194 basis points year-on-year and 437 basis points compared to the pre-pandemic fourth quarter of 2019 as merchandise expansion was a key driver of bottom line. The company reduced print advertising, which allowed more flexibility in pricing and purchasing while significantly reducing advertising spend. Despite the pre-pandemic outperformance in 2019, same-store sales fell by (-12%) year-on-year to the fourth quarter of 2020, when same-store sales increased by 31.8%. He concluded: “Looking ahead to March we face very challenging competition from last year when sales benefited greatly as COVID restrictions eased and there was a resumption of in-person school classes and sports leagues and stimulus distribution -Checks gave .”

BGFV Opportunistic pullback levels

Using the rifle charts in the weekly and daily timeframes provides an accurate view of the landscape for the BGFV stock. The weekly rifle chart collapsed near $25.44 Fibonacci (fib) level. The weekly gun chart’s downtrend bottomed at the Fib of $14.95 before bouncing higher. The 5-period weekly moving average (MA) is unchanged at $16.49, the 15-period MA at $17.77. The weekly stochastic formed a mini-puppy attempt through the 20-band. The weekly newspaper Market Structure Low (MSL) Buy Trigger on a break above $17.29. The daily rifle chart uptrend was rejected at the 50-period MA at $17.56 as the 5-period MA stagnates at $16.91 and the 15-period MA stagnates at $16.50. The daily stochastic fell back below the 80 band. The daily upper Bollinger Band (BB) is $17.88 and the lower BBs is $15.04. Prudent investors can look for opportunistic pullback levels at $16.45 Fib, $15.50, $14.35 Fib, $12.93 Fib, $12.50, $11.21 and $10.42 Fib. The upward moves range from the $20.52 Fib level to the $26.44 Fib level.