COVID-19 hits Big 5 Sporting Goods as chain posts loss
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The first quarter loss reported this week by Big 5 Sporting Goods – the US retail chain whose range includes fishing tackle – is in line with projections provided in late February.
Net loss for the quarter was $4.6m, compared to net income of $1.7m in the same quarter last year.
The quarter ended March 30, but April’s comparables tumbled 39% due to store closures allied to COVID-19. However, May’s sales and margins are climbing as stores reopen and consumers seek activities that fit within social distancing guidelines, said the company.
Big 5’s same-store sales for the quarter dropped 10.8%. Net sales were $217.7m compared to $245.3m for the same period in 2019. Gross profit decreased 14.9% to $64.6m.
Selling and administrative expenses were reduced by $1.2m for the quarter, mainly due to print advertising costs.
“Despite the extraordinary impact of the pandemic, which forced the closure of approximately one half of our stores for the last 10 days of the quarter, our earnings performance was within the guidance range we originally provided and subsequently withdrew due to the uncertainties surrounding COVID-19,” said Steven G. Miller, company Chairman.
“As consumers reacted to COVID-19, our nimble buying and distribution infrastructure has pivoted to fulfill the demand for a rapidly shifting merchandise mix.
“Our business is in a solid financial position, reinforced by additional capital resources from our credit facility, a disciplined expense reduction strategy, accelerating inventory turns and anticipated positive operating cash flow throughout the first two months of the second quarter.”
Big 5, which has more than 400 stores, is not providing guidance for the second quarter of 2020.