BGFV - Earnings call transcript Q1 2021 | Big 5 Sporting Goods Corporation

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Operator

Good day, ladies and gentlemen. Welcome to the Big 5 Sporting Goods First Quarter 2021 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 introductions, opening to Mr. At for and I'd to this time over remarks like conference turn the Miller. go sir. Please ahead

Steve Miller

Barry to conference Thank quarter XXXX for of read the Harbor will as the to fiscal I review everyone. provide Good of you, results now Welcome fiscal statement. quarter call as operator. our financial XXXX. first Today, over call. Safe turn second XXXX quarter first we an will afternoon, for to our our the well outlook

Barry Emerson

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

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

Steve Miller

Barry. you, Thank

consecutive results to delivering are of bottom-line our with ahead significantly XXXX our quarter top-and excited earnings. report quarter of fourth We This an extraordinary fiscal start record first to guidance. quarterly marks

balance shareholders. past return the and a The the announced to XX quarterly in more we expansion, an structure. our and XX% performance increase of we combination success strengthened regular has us dividend. value strong significantly positioned margin merchandise over achieved improved was of to a our months Our driven Today, top-line sheet by sales, have cost course

declared dividend share. a special of we cash per $X Additionally,

invest like very shareholder the on to in some our returns the on flexibility to more position, to while healthy first to sheet cash would our Given we're date. continue financial to will give Barry and quarter and first, cash I the and detail provide use able maintaining color second also performance our balance our momentum in strong our cash. flow business. But quarter provide these

were a said, bit the made and comparisons calendar by comparable $XXX.X due Last million the compared store the significant to First first related was same-store sales calendar $XXX.X the sales fiscal of year. to first up XXXX. quarter are period. million by year comparisons, a sales XX.X%. pandemic fiscal a That which net of sales because impacted not materially net also weight XX-week muddy were are quarter last net Year-over-year record are basis quarter impacted last was to closures shifts days shifts a on fiscal year's of XX over for

in February, rollout of sports by due same-store headwinds pandemic. sales at products. approximately by last January related same-stores team driven were by Looking the as closures, quarter, February to very been year strong this had whereas sales of yet lead up mid-single-digits, the increased was impacted widespread impacted part year XX% heavily not comparisons activities in winter the

plans, Excluding In XX%. products February. significantly March, in sales or other team were over up of than ahead more product related to categories sport our accelerated we're XX% and up

with our markets resume we stimulus the March and with Much throughout plan As demand to reopenings above and practice two throughout distribution our of games The school the benefits easing comped of from COVID year. markets began comparisons widespread of incremental the the acceleration last checks. also weeks late restrictions. for coincided sales in our as the strong category reflected exceptionally in last of expected as foreclosures were team against sales was period sports our

first were we XX% almost the have XX% received categories all levels. in On up were the realize the than footwear hardgoods a XX%. from of sales unit. which three In sale, virtually strong in more year-over-year across per related of approximately up number XX%. Kingsport, basis, units our increase exceptional approximately sales; per pumped an our the increases demand approximately price of and return benefits apparel, merchandise reflecting saw of average the was major up performing sale extraordinary up categories; and quarter, largest With we been XX%; both average Transactions all the at winter

mix achieve only in with did million also up $X.XX to sales key in along first benefit were quarter, drivers the product we share, the continue merchandise our and generated results spend the per improved and continue quarter, year. favorable margins, below for margins continue also but non-recurring shifts or promotional points with an first structure to very margin to hours we any for We of merchandise compared benefit the including Bottom cost activity quarter XXX strong basis as store the significantly of $X.XX levels. we and from healthy operate to prior Not net Reduction benefits. line, $XX.X historical advertising in first income record game.

remarkable wish supply inventory, of tremendous time done retail. be before has suspect There chasing more the widely the we categories, a hot to where disruptions will our Given pace I had by certainly some job has sales that chain complicated supply earnings, catches demand. drove we inventory are it reported categories in up been which these team numerous throughout

impact certain to news We along retailers. a Nike. to chain discussing regarding our five trending, of business our take large with quarter address bid will I an with expansion direct-to-consumer moment Nike's other of originally wanted informed that some were Before second initiatives

longer shipments end no this a will the by directly year, result, receive from we of Nike. As

our a products, we a impact X% will authorized sales. reduction Nike's diverse to source we decision on our of be chain and represented will certain many and to mix. that material Nike in Based by Nike lead our of Nike approximately will product products continue sales. effective purchase this impacted We expect licensees. significant flow Although products flexible on XXXX XXXX of from and The not very do have from we any current supply products, vendors products

brand product to enter agnostic decision, response by us new to we and our shop From believe stores encouraged opportunity are ability our compelling and vendors, XXXX of our standpoint, Nike's disappointed a convenience. a we Although to about assortment for expand a that existing and through stores. relatively value and many transition offer customers in the our the customer by confident in to other quite we both this presence their team's I'm in beyond. work continue are

widespread any strong closures trends, point up our sales plus that from we're Compared pleased year-over-year now quarter to start of is XXXX quarter-to-date store running measure. holiday. XXX%, to but that calendar out current a by Turning year I copying second Easter off over are very benefit last shift a to tremendously comparisons against should

shifts XXXX. same-store adjusting for QX with Easter, this the Given by of the approximately associated not calendar start comparable are which points XX% XXX XXXX, margins period results after pandemic. compare up for unusual the the the point basis impacted with circumstances to in versus running was On sales up sale year relevant year's is more with last approximately obviously basis that of

it's golf search improve experiencing indicating levels. have has a is catalyst be Big beaches. encouraging higher people's for in the is or to look product many recreational and continuing than historical very that's trending the we We're high tennis, perform activities, or the lakes, is have well family our activities healthy This to forefront customer leverage deliver X backyard to going the a trusted some strong and year traffic minds what they assortment our at to significantly our been convenient the need. destination levels, above insane of at or results. mountains we restrictions engage ideally to find the our or business pandemic are trends. find active and pandemic been been market, stay for at and current these reengage as improving, to structure cost desire through are particularly our positioned situated to is As relating in continue conditions enthusiastic whether to categories about and The that, we what feel and trends, that to the past ever in In

Now the I Barry. will to turn call over

Barry Emerson

Thanks Steve.

XX.X shifts fiscal quarter the The to comparable prior which partially however, offset fiscal week fiscal caused the the on me increase our XXXX later impact related one therefore XXXX as XXXX that our an quarter fiscal during begin shifts fiscal net impacts was are second made approximate to impact shifts have fiscal the the from million related Gross note stores basis, from quarter Company's on billion sales comparisons that same-store did an as for from the and the are in From calendar unfavorable quarter. sales the XX.X million XXXX sales first a our by Easter net holiday XXXX; of year. sales to First in Company not first in material closed. the to the week for unfavorable XX-week well XX the quarter XXXX calendar profit a to the calendar same-store comparisons. increased affected shift first certain first let of calendar

insurance the lesser due performance XXXX and to elimination primarily combination administrative and Our and an expense net percentage fiscal with advertising point offset gross higher the of partially XX.X%, year. settlement profit expansion accruals. prior costs first the occupancy a sales by higher margin for and partially sales distribution the prior the margin basis largely volumes. the that compensation as capitalized XXX along reduced XXXX first lower by was reductions agreement an Steve a first The print based million in our a point in degree favorable as versus of the the a incentive period, a costs mentioned, sales year percentage and of prior and expense versus Selling liability XX.X% margins to increase employment into reflects for Selling from the merchandise representing offset improvement quarter expense quarter. warehousing quarter period basis profit the administrative the quarter of inventory impact net lower of decreased fiscal versus X.X expense XXX gross was to in of year XX.X% in due

was Now elimination and employment Net share of diluted the quarter $X.XX $X.XX a prior per Adjusted fiscal income of to net per benefit the This the share first a diluted of the fiscal looking EBITDA XXXX liability, increase billion at settlement. year to or agreement first $X.X $X.XX our including quarter in per to bottom first million for line. a the loss the of basic period. insurance related quarter XXXX to $XX.X $X.X fiscal compared for million of the of share compares in million, of loss $XX.X XXXX. or

inventory in end sheet, the sell-through compared reduction XX.X% fiscal Turning merchandise winter broad the reflects at combined first of strong of XXXX with our inventory strength a year. to merchandise categories. the product our prior across down was the quarter balance based to This our

in obtain team to Our our the but have vendors by closely buying impacted work key to some chain. the widely been we reported instances, disruptions continues supply with in merchandise,

million our XXXX. fiscal acquisitions of quarter capital at excluding Looking our non-cash in totaled first the spending, CapEx X.X

year, the distribution level center more and ramp we computer equipment, up $XX hardware For purchases, million CapEx $XX the representing of to full fiscal expect in remodeling a stores. software in our million, and normalized new primarily range store-related to to investments

quarter open The expansion, the generate allowed sales of cash structure combination approximately substantial merchandise close operating year, XXXX. flow new two cost five to first to and stores. margin improved growth, fiscal expect For approximately stores us for we'd and the of

a was operations from million the flow cash $XX period. positive for Our

cash and and in of million the a operating a improvement facilities cash way. fiscal and the This the as a in first a of with of a ended cash borrowings quarter results million. to first the strong first end XXX.X of the $XXX.X the over under end $XX.X million year-over-year million quarter. no and XXXX year XXXX as and of of This sheet net basis XX.X cash compares equivalents of cash reflects improvement million XXX.X course in borrowings to fiscal of impact quarter. substantial positively and the Our our our balance zero XXXX to XX.X and net on fiscal borrowings million cash We continue equivalents credit cash with of

dividend and June flow As our Steve $X.XX our declared in regular quarterly per share, of strength of outstanding on cash Board of mentioned June annualized to paid from per consideration $X.XX business cash $X.XX will at per is of X, of XX% in stock be XXXX dividend as common share in Directors of history. our share of XX, stockholders sheet, the This a which the XXXX. the record highest increase balance has Company's rate

declared has X, of share, on XXXX. XX, per June to amount be May XXXX Directors as record special Additionally, will dividend $X our Board a of of stockholders of cash in paid the which

long the pleased business our a value continuing to We dividend to conditions our shareholders, to financial financial strength in while have returning are invest and a history increase flexibility pay and of also and we the of regular special provide us our business. dividend,

spend minute on guidance. Now a I'll our

For Note a in to and in XXXX XX% second in same-store diluted XXXX, of included quarter, per guidance the share the the expect range $X.XX This $X.XX. to earnings benefit of sales which of increase XX%, of fiscal quarter same-store a expense to awards. share we associated of both the also year diluted decrease rent fiscal $X.XX second that year. range closures savings to related compares fiscal widespread last X.X% to special sales last COVID-XX earnings net and compared performance and of eminent reflects share, calendar benefits shifts XXXX litigation, this recognition by quarter partially second domain our employee in store and recovery approximately per bonus offset guidance with year against from comping to $X.XX abatement from diluted related

following May be comping by will reopening. year sales the And middle of the ramp point, We store will store majority the from this against of that up cycle we year. last closures in our

Turning two from our calendar holiday to quarter shifts, shifts. benefits the second

of this second a Holiday are XXXX of QX Sunday, quarter from have the the on year. in of first because up First, fiscal our into picked shifted Easter XXXX the Easter we quarter closed stores day already sales fiscal

we holiday July third second into With the XXXX. this of of the shift of from will higher the quarter volume holiday our quarter shift fiscal Xth second XXXX the And will fiscal Second, from quarter benefit third week guided into the shift. not negatively keep from that third our that by mind in modeling be a second although the impacted will this year. quarter of in quarter are standpoint, quarter,

primarily operating our guidance product a second year-over-year our a strong on favorable quarter for demand we sales Also, significant now Operator, achieve and and second basis, quarter continued to we in leverage improvement to improved the Additionally, mix. our expect increased of due reflects margins That merchandise expectation questions. ready our structure. in shift in cost our concludes to to for prepared are continue sales remarks. the due continued

Operator

you. Lake coming Thank Capital. a be from question session. Instructions] today is question-and-answer now Mark Smith [Operator from We'll conducting Our Street first

is line Your now.

Mark Smith

here questions of couple A for you.

to we pandemic categories at just what or would of I kind call First wanted bit off, sales closure look a reopening versus little maybe categories.

home, it little to as any about we You exercise other starting you at team spoke talk a bit can of about that then, any at supply, in the call reopening? space, sports, And boost particular sales? reopening ammunition look firearms in categories but we're see you've helping some kind are seen well as if or outdoor doing there are this

Steve Miller

Mark. Sure,

of outdoor we the Throughout categories other business pandemic, much the prepared virtually the return, levels. certainly performing or the stores than As pretty performing sports, I backyard, individual golf had yards, the were sports at doing in escapes and well, well. categories and tried scooters, to well; like indicate remarks, all home team throughout categories, weather our team we're tennis. outside The high the once backyard very all very, sports the

sports really with pandemic. happened, very strong. argue our has came really been I'd pretty widely business entire particularly the sure and script the strong. we come had team and that firearm sports once in has dealing other a the nation things So with started flip reported, big reopen, much which hit and on the nationwide pandemic, worked over hurry, been than California a a in March, from I'm market everything Team

markets some into certainly of our which in manner. We in tried into miss to and April. as February early March, And up season. kicking of as our by fall January, had everything top seasons, so for and course March would very have of had we of start business soccer just early We kind schools positive many the traditionally we're that in a working make in football baseball over really

Mark Smith

were to And did front categories Have other things it doing over shift pandemic? consumer exercise categories. XX you said seen kind they're outdoor you've Okay. behavior what to where months that they slowdown any during the in yard, the that like sounds a you got backyard than haven't strong in of there, seen the that last

Steve Miller

of first way Mark, which to the seen than whereas category one of guess now at backwards. was seeing level and in a look certainly that levels surge take going that stronger saw categories the 'XX, the I of still 'XX, onset for vines, certainly And to mean, not I example, the we have ago, levels we we at slowdown pandemic. exercise, off from performing see really year the at 'XX the the and 'XX, demand in of some really we're pre-COVID ago pure meaningfully if occurred,

So, across weather as the getting terrific when particularly I outdoors think in the will board. trends see we feel really strong the about ever, that and the interest it as and cooperates is strong recreating

Mark Smith

side, guys for? job your we on? the as eyes anything Are watching any keep and structure, anything our be on Anything that we labor look you cost done a hours should in inflationary rates that at you or cost we pressure good reduced new have seeing can

Barry Emerson

it's level of surprisingly labor market which, pressure, I challenges, really lot across only throughout labor just from store at wage, distribution center organization, standpoint. seeing nation. minimum think easy an and just at level for is Mark, really not are labor we just huge of in But that our enough, the Actually, course, the overall general, really markets, the a

pressure. and time product we're side. pressure And mitigating a also costs continuing how talked to lot an We've impact. about been the cost cost over seeing save so We're those that's on we've

they costs but and materials, this at along necessary, supply. costs, and the other some XXXX. And in trending. make about that and very have on in exceeds other we've continue evaluating were and depending labor So just recently costs and there's them prices those trended of point kinds to product terms to demand far as in so than still, of so good of watching to been levels have and the able investment, costs, we're store closely, time, pass freight we advertising able being feel But able inputs on, those good manage and raw we of to in increase of sales terms adjustments areas, to to as so lower certainly being costs, we're continue those still, in

Mark Smith

Steve, two think me, think growth regarding XXXX fiscal of I sales, significant don't impact year. expect more for I said just this you confirmed that correct? Is any Nike, and X% you

Steve Miller

That correct. is

Mark Smith

the then QX handy, if you've some And got I discuss were what you or for calendar can around? it us last can and handy, not, we give if year if one last of it me sales cadence that you offline? during shift know comps have move the But things the

Steve Miller

I that. that, think can I help provide Barry? Can they

Barry Emerson

I -- just was up Yes, you approximately April was were give was XX%. almost we up down QX XX%. and June slightly March, May can in

trending half, being you being and first when the quarter second significant half the year, and second -- in So, that's turning down half around strongly then see pretty the the and comment second the down can we half of significantly, being first up quarter. made the last the

Steve Miller

took of possibly stores of sudden the been and in off to a back quarter. our of very It a all really middle second reopen able we half May the were had the we lot of business flipped closed,

Operator

further our comments. for to reach closing Thank question-and-answer back floor the you. end I'll session. turn your Mr. over Miller of We

Steve Miller

Goods. joining all your a All you, for the our appreciate Have after to X I again quarter. We thank great speaking Big operator you today's right. interest and with in look conclusion forward you call. Well, thank of for Sporting afternoon. second us

Operator

That does webcast. you. conclude Thank teleconference today's

have You We may and disconnect you your participation lines at wonderful today. for thank this time day. your

Big 5 Sporting Goods (BGFV) 5 May 212021 Q1 Earnings call transcript