Big 5 Sporting Goods Reports Significant Declines in Financial Performance for Q3 and 9M Fiscal 2024

Big 5 Sporting Goods Corporation reported significant declines in financial performance for the third quarter and first nine months of fiscal 2024, compared to the same periods in fiscal 2023. For the 13 weeks ended September 29, 2024, net sales were $220.6 million, an 8.0% decrease from $239.9 million in the prior year. The decline in same-store sales was attributed to inflationary pressures and reduced discretionary spending, with major merchandise categories such as footwear, apparel, and hardgoods experiencing notable downturns.

Gross profit for the third quarter fell to $64.2 million, representing 29.1% of net sales, down from 33.2% in the previous year. This decrease was driven by lower merchandise margins and increased occupancy and distribution expenses. Selling and administrative expenses were $75.0 million, or 34.0% of net sales, slightly down from $76.6 million (31.9% of net sales) in Q3 2023. The company reported an operating loss of $(10.8) million for the quarter, compared to an operating income of $3.0 million in the same period last year.

For the 39 weeks ended September 29, 2024, net sales totaled $613.8 million, a decline of 10.8% from $688.4 million in the prior year. Gross profit for this period was $183.3 million, or 29.9% of net sales, down from 32.9% in the previous year. The company recorded an operating loss of $(35.3) million, contrasting with an operating income of $2.5 million in the same period of fiscal 2023. The net loss for the first nine months was $(48.2) million, compared to a net income of $1.8 million in the prior year.

The company’s total current assets decreased to $288.9 million as of September 29, 2024, from $310.2 million at the end of fiscal 2023. Total liabilities rose to $416.0 million, up from $400.3 million. Retained earnings also saw a significant drop, falling from $169.7 million to $119.3 million.

In terms of strategic developments, Big 5 has suspended its quarterly cash dividend beginning in the third quarter of fiscal 2024 due to macroeconomic challenges. The company anticipates opening three new stores while closing approximately eleven in fiscal 2024. Additionally, a cumulative indemnity reserve of $1.5 million has been established for settlements related to ongoing labor law complaints.

Overall, Big 5's financial results reflect the challenges posed by inflation and changing consumer behavior, leading to a reevaluation of its operational strategies and financial commitments.