Big 5 Sporting Goods Corporation (BGFV), a leading sporting goods retailer lowers its outlook on account of weak comparable-store sales for second-quarter 2010. Sales fell 0.5%, breaching its own guidance of low-single digit growth, and were even not able to surpass the positive 0.3% sales growth reported in the prior-year quarter. Sluggish economic recovery in its markets put hindrance on its performance.
Followed by weak same-store sales result, the company now expects to earn 20-23 cents a share in the second quarter of fiscal 2010. This comes in below the previous guidance range of 24-30 cents a share.
The deceleration comes after the company had posted three straight quarters of positive same-store sales growth of 2.4% in first-quarter 2010, and 0.1% and 1.6% in fourth and third quarters of 2009, respectively. Management noted that performance across its major categories was consistent and merchandise margins have held up.
Besides, the economy is to witness unemployment that is expected to last until 2012. Until businesses start hiring again, consumers are unlikely to splurge.
Zacks Consensus Estimate
For the second quarter of fiscal 2010, Zacks Consensus Estimate is at 22 cents a share, toward the middle of the guidance range of the company. In the last 30 days, all 8 analysts covering the stock moved in the downward direction, thereby reflecting negative sentiment. The analysts have lowered their estimate on the stock by 6 cents in the last 30 days. We currently have a Zacks #4 Rank (Sell) on Big 5 shares.
Read the full analyst report on “BGFV”
Zacks Investment Research
