Archive: Big Five Sporting Goods (BGFV)

BGFV: Big Five Guides Lower But More Accurately?

Small Cap Watch List (Track at Marketocracy) member Big 5 Sporting Goods (BGFV) reported financial results for the fiscal 2007 second quarter ended July 1, 2007. Net sales increased $6.0 million, or 2.9%, to $217.8 million and were in line with expectations. Same store sales declined 0.2% for the second quarter, representing the Company’s first quarterly decrease in same store sales in over eleven years. Net income for the second quarter of fiscal 2007 was $5.9 million, or $0.26 per diluted share, below the $0.33 per diluted share for the second quarter of fiscal 2006 but above consensus estimates of $0.25 per share.

Of course, that is according to the report prepared by management, who “lacked the necessary depth of personnel with adequate technical accounting expertise to ensure the preparation of interim and annual financial statements in accordance with GAAP,” according to the company’s former auditors. So I’ll take it with a grain of salt. Meanwhile, the company is working on the issue but warns it will cost:

For the third quarter of fiscal 2007, the Company expects to realize same store sales growth in the low single-digit negative to low single-digit positive range and earnings per diluted share in the range of$0.27 to $0.35. Third quarter guidance assumes that sales will continue to be challenged by macro-economic issues affecting the  consumer environment and, compared to the prior year, reflects higher administrative expenses to support the Company’s overall growth and financial reporting initiatives. For the fiscal 2007 full year, the Company expects to realize same store sales growth in the low single-digit negative to low single-digit positive range and earnings per diluted share in the range of $1.22 to $1.42.

Analysts were expecting $0.36 next quarter and $1.41 for the year.  Of course, it may be worth it to have a lower but more reliable earnings number.

Topics: Big Five Sporting Goods (BGFV), Retail (Specialty) | No Comments

Consumer Spending Slowing, At Least for Names I Watch

Retail sales reports are out today, and for my Watch List companies they don’t look so hot.

Small Cap Watch List (Track at Marketocracy) member Big Five Sporting Goods (BGFV):

For the fiscal 2007 second quarter, net sales increased $6.0 million, or 2.9%, to $217.8 million from net sales of $211.8 million for the second quarter of fiscal 2006. Same store sales declined 0.2% for the fiscal 2007 second quarter, representing the Company’s first quarterly decrease in same store sales in over eleven years. The Company now expects earnings per diluted share for the fiscal 2007 second quarter to be in the range of $0.23 to $0.26, compared to previously issued earnings guidance of $0.25 to $0.33 per diluted share.

Mid Cap Watch List (Track at Marketocracy) member Abercrombie & Fitch (ANF) was slow, but at least improved from the dismal performance of recent months:

June comparable store sales increased 2% for the five-week period ended July 7, 2007, compared to the five-week period ended July 8, 2006.

Other signs are pointing to the consumer slowdown extending beyond just housing-related stores. The consumer was the last leg in the economy’s stool, so businesses had better take up the slack or we could be in for more of a slowdown than we already have.

Topics: Aeropostale (ARO), Big Five Sporting Goods (BGFV), Cato (CTR) | 2 Comments

Small Cap Watch List Changes

With the end of the first quarter approaching, it is time to adjust the names in my Watch Lists. I will price all the new lists as of the close on Friday, June 29.

Today I present my planned updates to the Small Cap Watch List. There was a fairly high level of turnover to the list. 12 of the 24 names from the previous run made it to the current list, which was also 24 names. Performance-wise, the list created in March has returned an unweighted average return of 2.6% through June 28, with 80% of the stocks in positive territory. All of the money-losers from the previous list fell out of consideration.
So without further ado, the names on the chopping block from the previous list are: PW Eagle (PWEI), Insteel Industries (IIIN), Allied Defense (ADG - Annual Report), Hartmarx (HMX), Parlux (PARL), Hansen Natural (HANS), FirstFed Financial (FED), Young Innovations (YDNT), ITT Educational (ESI), Rent-a-Center (RCII), Valassis (VCI), and Travelzoo (TZOO). The castaways include four of the five money losers from the previous portfolio (HMX, PARL, YDNT and TZOO) as well as the biggest gainer (ESI).
The new list is:

070630smallcap.jpg

I will continue to track both lists on StockPickr.

Topics: Aeropostale (ARO), Allied Defense (ADG), American Oriental Bioengineering (AOB), Big Five Sporting Goods (BGFV), Central European Media (CETV), DXP Enterprises (DXPE), Delta Apparel (DLA), First Regional Bancorp (FRGB), FirstFed Financial (FED), Hansen Natural (HANS), Hartmarx (HMX), Helix Energy Solutions (HLX), Hexcel (HXL), ITT Educational Services (ESI), Impac Mortgage (IMH), Ingram Micro (IM), Interdigital Communications (IDCC), Landstar Systems (LSTR), NVR (NVR), New Jersey Resources (NJR), Nutri Systems (NTRI), PWEI, Parlux Fragrances (PARL), Pinnacle Airlines (PNCL), Prepaid Legal (PPD), RAD, Reliv International (RELV), Rent-A-Center (RCII), Russell 2000 (RUT), S&P Smallcap 600 (SML), Silgan (SLGN), Stock Market, Tempur-Pedic (TPX), Travelzoo (TZOO), US Concrete (RMIX), Vaalco Energy (EGY), Valassis Communications (VCI), Watch List, Young Innovations (YDNT) | No Comments

BGFV: Big Five Does the Big Four Shuffle

Small Cap Watch List (Track at Marketocracy) member Big 5 Sporting Goods (BGFV) tried to slip some important shareholder news (a change in auditors) in an 8K filed late Friday afternoon:

During the two fiscal years ended December 31, 2006, and the subsequent interim period through May 25, 2007, there were no: (1) disagreements with KPMG LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference in connection with their opinion to the subject matter of the disagreement, or (2) reportable events, except that KPMG LLP advised the Company of the following material weaknesses as existing as of January 1, 2006:

1 The Company lacked the necessary depth of personnel with adequate technical accounting expertise to ensure the preparation of interim and annual financial statements in accordance with GAAP.

Just a minor disagreement.  As I noted recently, according to Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports, Second Edition, investors should be wary of firms that change auditors:

Changes could offer clues to financial shenanigans, especially in those cases in which the auditors may have been fired because they found some problem that they were willing to supress.

A company that fires its auditor because of a disagreement over financial principles and then shops around for a new auditor that is more agreeable to its interpretation of GAAP has engaged in what is known as “opinion shopping.” To prevent this practice, the SEC requires a company that changes auditors to file a Form 8-K, notifying the commission of the termination and giving the details of any accounting disagreements. Unfortunately, few disagreements are ever actually disclosed in these filings.

Well, perhaps they didn’t disagree on the fact that the company couldn’t adequately prepare financial statements, but that doesn’t make me feel any better about it.

Topics: Big Five Sporting Goods (BGFV), Stock Market | No Comments

BGFV: Big Five Sporting Goods Seeing Sales Slowdown

Small Cap Watch List (Track at Marketocracy) member Big Five Sporting Goods (BGFV) reported earnings:

For the fiscal 2007 first quarter, net sales increased $9.8 million, or 4.7%, to $217.0 million from net sales of $207.2 million for the first quarter of fiscal 2006.Net income for the first quarter of fiscal 2007 increased to $7.6 million, or $0.33 per diluted share, from net income of $5.9 million, or $0.26 per diluted share, for the first quarter of fiscal 2006.

Analysts were expecting the company to earn $0.32 on $219 million in sales. And while the sales figure was just a bit light in Q1, the company reported a more significant slowdown beginning in mid-April, which will cause the company to fall well short of the $0.37 in EPS analysts were expecting.

For the second quarter of fiscal 2007, the Company expects to realize same store sales growth in the flat to low single-digit range and earnings per diluted share in the range of $0.25 to $0.33. Second quarter earnings guidance reflects lower than anticipated sales beginning in the second half of April and, compared to the prior year, reflects lower distribution center expenses offset by a reduction in inventory cost capitalization and higher administrative expenses to support the Company’s financial reporting initiatives. The Company continues to expect full-year same store sales growth in the low single-digit range and full-year earnings per diluted share in the range of $1.47 to $1.57.

After beating by a penny in Q1 and missing by $0.04-$0.12 in Q2, the chances are that the full-year earnings will come in at the lower end of that range, whereas the Street was near the top with a $1.56 target. Shares were trading down in after-hours action.

Topics: Big Five Sporting Goods (BGFV), Stock Market | No Comments

Small Cap Watch List Changes

With the end of the first quarter approaching, it is time to adjust the names in our Watch Lists. We will price all the new lists as of the close on Friday, March 30. Today we present our planned updates to the Small Cap Watch List (Track at Marketocracy).

Frankly, we were surprised at the amount of turnover in our screens. Only 9 of the original 29 names made the cut for the new list (which comes in at only 24 names.) Still, given the level of outperformance we saw in the first quarter (actually just two months) and the fact that much of those gains were achieved early, perhaps the turnover is warranted.

So without further ado, the names on the chopping block from the previous list are:

Silgan Holdings (SLGN - Annual Report); Steel Dynamics (STLD - Annual Report); NVR (NVR - Annual report); Middleby (MIDD); Vector Group (VCG); Sanderson Farms (SAFM); Downey Financial (DSL); Waddell & Reed (WDR); Wilshire Bancorp (WIBC); Harrington West (HWFG); Gamco Investors (GBL); Apria Healthcare (AHG); Papa John’s (PZZA); Cato Corporation (CTR); Meredith Corporation (MDP); CSG Systems (CSGS); Energy East (EAS); Dynamics Research (DRCO); Ingram Micro (IM); and Dade Behring (DADE).

The new watch list will be:

070330SmallCapWatchList.jpg

Topics: Aeropostale (ARO), Allied Defense (ADG), Apria Healthcare Group (AHG), Big Five Sporting Goods (BGFV), CSG Systems (CSGS), Cato (CTR), DXP Enterprises (DXPE), Dade Behring (DADE), Downey Financial (DSL), Dynamics Research (DRCO), Energy East (EAS), FirstFed Financial (FED), Gamco (GBL), Harrington West Financial (HWFG), Hartmarx (HMX), Helix Energy Solutions (HLX), Hexcel (HXL), Ingram Micro (IM), Insteel Industries (IIIN), Meredith (MDP), Middleby (MIDD), NVR (NVR), Nutri Systems (NTRI), PWEI, Papa John's (PZZA), Parlux Fragrances (PARL), Rent-A-Center (RCII), Sanderson Farms (SAFM), Sasol (SSL), Steel Dynamics (STLD), Stock Market, Vaalco Energy (EGY), Valassis Communications (VCI), Vector Group (VGR), Waddell and Reed (WDR), Wilshire Bancorp (WIBC), Young Innovations (YDNT) | No Comments