Huge 5 Sporting Items Sees Q2 Gross sales Climb 31 %

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Big 5 Sporting Goods Corp. reported that earnings more than tripled in the second quarter that ended July 4, as sales in the same store rose 31 percent. Earnings and sales were well above company forecasts.

Steven G. Miller, Company Chairman, President and Chief Executive Officer, said, “Our second quarter results exceeded expectations as we achieved another quarter of record sales and earnings. Revenue in the same stores in the second quarter of fiscal 2021 rose 31.2 percent year-on-year and 33.4 percent compared to the second quarter of fiscal 2019, reflecting continued strong broad demand in our product mix. For the second quarter, we posted record net income of $ 36.8 million on cash flow from operations of $ 88.7 million. Our net results benefited from a further expansion of our trading margins and from a cost structure that was significantly improved compared to the prepandemic. Although we are experiencing the peak of the COVID-19-related spike in sales in 2020 and being hit by the widespread supply chain disruptions and human resource challenges in retail, we have continued to deliver strong sales growth and margins compared to historical forerunners. Pandemic levels. Given the overall strength of our business, our board of directors has decided to increase our regular cash dividend 39 percent to an annual rate of $ 1.00 per share, our fourth dividend increase in the past four quarters. “

Sales in the same stores rose 31.2 percent from the high-end forecast of 27 percent. Earnings per share of $ 1.63 for the second quarter exceeded the forecast range of $ 1.05 to $ 1.25.

Net sales for the second quarter of fiscal 2021 were 326.0 million, while sales in the same business increased 31.2 percent in the second quarter of fiscal 2021. In addition to last year’s temporary store closings related to COVID-19, the increase in net sales also reflected the positive impact of a calendar shift related to its 53 year week of fiscal 2020, which translates into a benefit from the Christmas shopping postponement before July 4th from the third Quarter of fiscal year 2020 to the second quarter of fiscal year 2021 and a calendar shift of the Easter holidays, during which the company’s businesses will be closed from the second quarter, led fiscal year 2020 to the first quarter of fiscal year 2021.

Gross profit for the second quarter of 2021 rose to $ 126.9 million from $ 72.2 million in the second quarter last year. The company’s gross profit margin was 38.9 percent for the second quarter of 2021, compared to 31.7 percent in the second quarter of last year. The gross profit margin increase largely reflects a 380 basis point increase in merchandise margin, significant leverage in store usage costs as a percentage of net sales, and a positive impact from higher selling expenses capitalized in inventory for the quarter.

Selling, general and administrative expenses as a percentage of net sales were 24.0 percent in the second quarter of fiscal year 2021 compared to 25.6 percent in the second quarter of fiscal year 2020. Total selling and administrative expenses for the quarter increased year-on-year by 20.1 million US dollars, mainly because the same period last year included significant temporary store closures due to COVID-19 and also because the second quarter of fiscal 2021 included higher provisions for performance-based incentive pay. Selling and administrative expenses for the second quarter of the 2021 financial year and for the second quarter of 2020 each included a special recognition bonus for certain branch employees.

Net income for the second quarter of fiscal year 2021 was $ 36.8 million, or $ 1.63 per diluted share, compared to net income for the second quarter of fiscal year 2020 of $ 11.1 million, or $ 0. $ 52 per diluted share.

When it released its first quarter results on May 5, Big 5 said sales in the same store would grow between 22 and 27 percent and earnings per share between $ 1.05 and $ 1.25 in the second quarter.

For the 26 week period ended July 4, 2021, net sales were $ 598.8 million compared to net sales of $ 445.7 million for the first 26 weeks of last year. Sales in the same business increased by 31.5 percent in the first half of the 2021 financial year compared to the same period of the previous year. Net income for the first 26 weeks of fiscal 2021 was $ 58.3 million, or $ 2.59 per diluted share, including net income for the first quarter of $ 0.06 per diluted share related to an insurance settlement and the elimination of an employment contract obligation. This compares to net income for the first 26 weeks of fiscal 2020 of $ 6.5 million, or $ 0.31 per diluted share, including previously reported net income of $ 0.13 per diluted share.

Adjusted EBITDA was $ 52.9 million for the second quarter of fiscal 2021 and $ 83.2 million for the 26 week period ended July 4, 2021. EBITDA and Adjusted EBITDA are non-GAAP financial measures .

Balance sheet
The company ended the second quarter of 2021 with zero borrowing under its credit facility and cash of $ 118.9 million. That compares to zero borrowing and $ 100.1 million. The company increased its cash by $ 18.8 million in the second quarter of 2021 while also paying shareholders $ 25.8 million in cash dividends. At the end of the second quarter of 2021, total inventories fell by around 5.6 percent compared to the second quarter of the previous year.

Quarterly cash dividend
Given the company’s continued strong business activity, cash flow generation, and improved balance sheet, the company’s board of directors has announced a 39 percent increase in its quarterly cash dividend from $ 0.18 per common share outstanding to $ 0.25 per common share outstanding Share that will be paid out on September 15, 2021 to shareholders of record from September 1, 2021. In addition to the special dividend of $ 1.00 per share paid in the second quarter, this is the fourth increase in the regular quarterly dividend compared to the last four quarters, from $ 0.05 to $ 0.25 per share.

Outlook for the third quarter
For the third quarter of fiscal 2021, the company expects sales in the same business to be in the positive mid-single digits and expects earnings per diluted share in the range of $ 0.95 to $ 1.15. That compares with a 14.8 percent increase in revenue in the same business and earnings per diluted share of $ 1.31 for the third quarter of fiscal 2020, which at that point was the highest revenue and profit of any quarter in the company’s history . For the third quarter of fiscal 2019, earnings per diluted share were $ 0.30. The forecast for the third quarter of 2021 reflects the expected ongoing effects related to widespread supply chain disruptions and staffing problems in retail. The year-over-year forecasts also reflect the adverse impact of the household calendar shift associated with the 53-week 2020 fiscal year, which moved the July 4th holiday from the third quarter of fiscal 2020 to the second quarter of fiscal 2021. As a result, the third quarter of the 2021 financial year excludes the historically high-volume holiday week of July 4th, which will be replaced by a historically low-volume week in early October. As a result of this shift, the company expects an adverse impact of approximately $ 0.20 on diluted earnings per share for the third quarter. This calendar shift does not affect the company’s revenue calculation in the same store, which is measured on a comparable weekly basis. The company’s revenue and earnings guidance for the third quarter of 2021 assumes that new conditions related to the COVID-19 pandemic, including any regulations enacted in response to the pandemic, will not materialize the company’s operations during the reporting period will affect.

Store openings
The company currently has 429 stores in operation, which corresponds to a store closure in the third quarter to date. For the remainder of fiscal 2021, the company expects to open about five stores and close about one store.

Courtesy photo Big 5

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