BGFV - Earnings call transcript Q4 2019 | Big 5 Sporting Goods Corporation

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Operator

Good day, ladies and gentlemen. Welcome to the Big 5 Sporting Goods Fourth Quarter 2019 Earnings Results Conference Call. Today's call is being recorded. With us today are Mr. Steve Miller, President and Chief Executive Officer; and Mr. Officer X Financial Goods. Chief Emerson, of Sporting Big Barry

sir. introduction, opening to Mr. At ahead, for and Miller. I'd go to this time, over remarks like conference turn Please the

Steve Miller

to guidance Thank on as our Today, you, of our will financial of business fourth our for well quarter for review afternoon, XXXX. provide fiscal operator. everyone. XXXX we XXXX quarter and the conference Good first fourth call. the quarter provide results as Welcome general updates

call the Harbor turn now to Barry Safe will I our read over statement. to

Barry Emerson

Thanks, that Steve. the of constitute the our plans Except any for to statements of XXXX. provisions prospects we future Private historical facts, Securities and forward-looking remarks pursuant Harbor about statements Litigation made may Reform make Safe of expectations, Act

and and cause described unknown annual that forecasted and known Form quarterly in any forward-looking current and obligation results. uncertainties made and include XX-K, update or on or our on by our fully reports undertake in uncertainties periods revise time that to our and our results those involve to Form may to materially Commission. other may We from Exchange future risks be statements the more These our statements differ from us no Securities on with actual filings Forward-looking time behalf. reports XX-Q risks

Steve Miller

year the sales, a XXXX each quarter merchandize produced margin growth strong you, X sound year. income meaningful year same-store management, including a with our was net we positive healthy earnings Thank Sporting expansion Barry. at enhancement of growth Goods, year-over-year Big expense of and with

fiscal for $XXX.X $XXX.X were million the net to at Looking quarter, our fourth of quarter fourth million XXXX. sales compared

our for margin up X.X% our merchandize fourth decreased margin. quarter, by in basis same-store the X.X% sales driven dollars gross Although quarter XXX increase a our point same-store sales were the for

drivers years. Our in our the ongoing quarter quarter than successful product impact to promotion. margin shift, favorable efforts and XX full our full expansion have and gains pricing mark year and the our for more each margin of any of strongest and been optimize of merchandize Key fourth mix the year buys for performance fourth strategic opportunistic margin

quarter, digit a we average in was Thanksgiving in weeks. of decrease single-digit quarter sale. that single sales during by low driven largely weather from The fourth realized key related a the Christmas increase the offset customer winter favorable strong by for Overall low products and winter transactions benefited

the From a apparel product well, winter fourth primarily single up standpoint by for products. driven the for digit in performed mid seasonal demand range quarter,

range our Our have was that footwear since sales category digit and was due to category due continued July. harvest effective been to down in single mid-single-digit [ph] in of up changes low part regulatory in in the ammunition California softness

the quarter California. store relocated commenting XXX ended quarter we Pittsburg, fourth store with California Now the on in activity, new Bishop our opened and in in stores operation. store during a We

During quarter not and stores. stores closed new the first of will three open XXXX have we any

full For closing currently and five opening stores five stores. approximately the we anticipate year, approximately

first Turning quarter current in XXXX. the now trends of to

quarter first very are winter-related across the year's favorable conditions During by highly challenging the and weather sales comparisons markets extraordinary products XXXX year's of we of facing against in weather. winter this driven disappointing quarter last our

California over in with particularly began the Unfortunately conditions conditions year this weather highly turned of market. our key our geography. winter in the Although solid quarter unfavorable the course

inches year. destinations period instance XX our during feet last quarter in more just For has snowfall compared to of to comparable date Mountain, one ski of of the the XX market Mammoth received than snowfall year the primary

similar California The other resource has in disparities year-over-year. snowfall seen

February XX% February XX% date. Our year of which winter-related winter-related to our for month. and with more products running accounted products quarter re January winter down really last the even business over of mid down over January XX% of Consequently, currently for to began and soften the over in for in sales sales sales in so

result, a approximately increase two-year that approximately to XX% comparable stack compared running we flat. down sales XX% now experienced in year. are relatively basis, the quarter-to-date sales period our same-store As a last are Thus overall during the

impact sales has it's winter a had the Given get of the true on on of over huge start the and underlying trends read traffic the to difficult business. to quarter, our

well, function overall our categories Although non-winter environment. aspects that related business macro softness could in some which our we a may appear certain we of general of performing are the it experiencing be believe does be

balance will overall of XX over the sales second products, our approximately that from and spot been strength transition date we margin. seasonal spring. for the bright we decreased as are our quarter, to continue has strategies of during basis expect as merchandize A to expansion this sales of the difficult continued merchandise Over Despite ease comparisons into drove improve high margin period of quarter benefit the our up headwinds sales winter we trending margins the margin the to XXXX. points from half

Additionally, relating we briefly touch the should issues Coronavirus. to on

degree Although the that to sell coming the working issues closely will many in supply impact over expect we we suppliers to that encounter. be disruption mitigate some are Coronavirus in specific on the might our point of products chain we effort or any date, sales overseas too from an produced pinpoint cannot chain business is there the however early any this our impact. At to the with material we it of month. supply our quantify We're and

fourth Barry turn first the guidance. provide provide who will I'll about over the call information Now more quarter quarter and to

Barry Emerson

Thanks Steve.

basis of increase in margin of fourth the points gross profit for XX.X% reflects the increase an fiscal versus merchandise XXXX points in margin costs to basis higher into fourth sales of of quarter. inventory XXXX. Our and the The XX.X% quarter over gross fiscal largely profit margin for capitalize for XXX distribution sales improved quarter to XXX

and XXXX termination print contract prior and administrative This due million employee the partially the as year. from selling labor a and expenses X.X Overall in to the charges expense expense benefit-related with selling quarter the by year advertising percentage fiscal year for at was offset and was expense in quarter. of higher even quarter lower for decreased Our the XX.X%. prior administrative primarily fourth prior the sales

Now the by income bottom charge share looking $X.X or our reduced share of per line, reported which million was impairment. for we $X.XX diluted per net fourth of $X.XX a asset at quarter for diluted

Excluding $X.XX were quarter high-end share. issued $X.XX the guidance per earnings our diluted this to range diluted charge, fourth previously share at per of of $X.XX

$X.X the full year sales previously full-year. $XXX.X increased For net net sales Same-store million were fiscal previously loss for compared per diluted $X.XX XXXX $X.X versus per Net XXXX the million $X.XX was fiscal charges in for $X.XX of share. income reported, XXXX fiscal XXXX fiscal including million per for X.X% Net was the as sales to reported. $XXX.X share as or share of million fiscal year. prior XXXX or

of $XXX.X in million the Turning decision to the increase certain related compared was up end merchandise inventory X.X% inventory year. year-over-year end The tariff at increases. our fiscal the basis, effort mitigate XXXX On an to $XXX.X at prior of store versus price accelerate inventory was orders to balance the fiscal our XXXX. million potential sheet to partly chain-wide a per reflects

inventory it inventory inventory purchases said, inventory in experienced the we this of through. right of over first level our season comparisons when course the and year-over-year last an adjusted to than carryover our to our to overall given have and size improve to quarter. quarter conditions our winter we soft winter anticipate products We effort end be greater year expect winter sell year exceptional was date, the we That

with and the carryovers seasonal through this inventory managed this past markdown little reintroduce and it in next of have season we product magnitude risk. buy around We will winter

capital center hardware acquisition million capital software Looking equipment reflect investments and remodeling, store-related computer million XXXX our total $XX and our of for purchases. at XXXX, and excluding We distribution CapEx representing non-cash spending non-cash excluding expenditures primarily stores, expect for remodeling, stores, center new in store-related distribution $X.X approximately acquisition IT continued currently system. our This investment to million. new fiscal $XX in fiscal

our $XX.X period. operating $XX.X higher compared fiscal income. From in for prior The operations positive flow million a in a merchandise the year offset from cash was increased flow perspective, cash funding reflects partially by a million decrease positive inventory, in flow primarily XXXX to net cash

a Board quarterly cash fourth of of also a $X.XX the first quarter quarterly paid our $X.XX share declared dividend dividend of For Directors share per for per quarter cash XXXX. and we the of

the long-term total at $XX.X $XX.X Our compared the end end million XXXX of at credit prior the year. revolving million to borrowings of

to in our manage our to and structure We balance business. continue maintain we appropriately healthy the a have sheet invest capital flexibility to

conditions minute first in quarter let's part are winter a on due highly unfavorable market. guidance, our tough throughout experiencing we discussed, a our spend Steve to as large weather Now

range digit single decrease to -- were loss This quarter, realize in the per per last quarter expect mid $X.XX For first the range share sales $X.XX. and of to mid-to-high in sales fiscal first and same-store to of we X.X% and share XXXX the the diluted when increased in a $X.XX. earnings year increase the expect compares to same-store

Steve, I'll for closing now call turn to the remarks. you some back

Steve Miller

Barry. you, Thank

conditions We pleased the hopefully the challenges can the business. XXXX fiscal weather more our in look XXXX. clearly deliver to volatile are start and we weather. happen of to solid we're While comps to with results, easing impact forward disappointed current The illustrate normalized quarter

always our structure. had margins on by is cost year managing team healthy improving generating to build sales Our hard the last we and success is working trends and prudently

call. We the to you look Thank after in again of joining conference speaking forward first conclusion for today's you our quarter. us with

Operator

concludes Ladies and gentlemen, teleconference. today's this

time. your lines Thank you may participation your this disconnect at You for

Big 5 Sporting Goods (BGFV) 25 Feb 202019 Q4 Earnings call transcript