Big 5 Sporting Goods shares fall in Friday trading despite posting strong 1st-quarter results

Big 5 Sporting Goods stock falls despite strong 1Q

EL SEGUNDO, Calif. — Shares of Big 5 Sporting Goods Corp. fell sharply Friday despite reporting an 82 percent jump in first-quarter profit that beat Wall Street expectations.

The discount retailer late Thursday posted net income for the three months ended April 1 of $5 million, or 23 cents per share, compared with $2.8 million, or 13 cents per share, in the year-ago quarter.

Revenue rose 4 percent to $218.5 million, from $210.3 million last year.

Analysts polled by Thomson Reuters, on average, expected profit of 21 cents per share, on $217.8 million revenue.

Revenue at stores open at least one year rose 2.4 percent for the period. The figure is an important gauge of retailer health, because it measures growth at existing locations, rather than from expansion.

Big 5 also forecast earnings for the second quarter in a range of 24 cents to 30 cents per share. Wall Street, on average, was expecting profit of 27 cents per share, with estimates ranging from 24 to 29 cents.

President and CEO Steven G. Miller said in a statement the positive results were driven by growth in the number of customers shopping in the chain’s stores, and higher average sales, especially of winter gear. He said he expects comparable sales to rise again in the current quarter.

“All said, this was a fine quarter,” said Wedbush Securities analyst Ellen Kang in a note to clients. She said the company is benefiting from efforts to cut costs, and kept a “neutral” rating on the shares with a $17 price target.

Ian Corydon, an analyst with B. Riley, kept a “buy” rating, and a $21 price target. “We expect BGFV to continue to reduce debt despite an increase in new store openings,” he wrote, using the company’s Nasdaq Stock Market ticker. He expect the company could be debt free by the end if fiscal year 2012, and predicted a dividend increase above its current 5 cents.

Corydon said the store’s “value proposition rings true with consumers,” and “management continues to execute admirably.”

Still, weighed down by another volatile trading session and a broad market decline, Big 5 shares closed down 88 cents, or 5.3 percent, at $15.73. Volume was nearly three times normal trading.