Sporting goods retailer Big Five Sporting Goods (NASDAQ:BGFV) will report third-quarter results today after the market closes, and the Fool is willing to be a good sport and give you perspective on what to expect.

What analysts say:

  • Buy, sell, or waffle? Eighteen big analysts track Big Five, though more than half (10) are fairly sanguine about the company, rating it a hold. Four rate it a buy, with the rest saying it will simply "outperform."

  • Revenues. On average, the analysts are looking for a near 8% increase in sales to $223.1 million.

  • Earnings. While only 13 were willing to take a guess at revenues for the quarter, all 18 analysts agreed to stake their reputations on earnings and came up with a consensus of $0.34 a share.

What management says:
Same-store sales, or "comps," an important retail number that measures sales at stores open for at least a year, are expected to notch another quarter of growth in the low to mid-single digits, according to management. If those sales ring up, it will be the forty-third consecutive quarter of such growth.

While management factored significantly higher fuel prices into its third-quarter earnings estimate of $0.32 to $0.36 per share, among other factors, the fact that fuel prices have dropped by nearly $1.00 per gallon over the last three months may allow Big Five to come in at the high end of its forecast.

What management does:
Margins at Big Five continue to dribble away due to increased costs from operating its new distribution center as well as higher fuel costs. While SG&A costs improved last quarter to ameliorate operating-margin impairment, that was largely due to a reduction in legal and audit fees related to the sporting goods retailer's financial restatements last year.

Margins % 07/05 10/05 01/06 04/06 07/06
Gross 36.0 36.0 35.5 35.4 35.4
Op. 7.1 6.6 6.1 6.1 6.3
Net 3.8 3.6 3.4 3.3 3.4
All data courtesy of CapitalIQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Ongoing issues with the company's new distribution center continue to be a drag on performance, though the stock itself has seemingly recovered from its summer doldrums and trades about 6% below its 52-week high. Sales were up almost 7% last quarter, but expenses have eaten into profits.

Even with the new distribution-center problems and the recovered stock price, this Fool thinks there may be room yet to run for Big Five. It trades at an earnings multiple discount to the rest of the sporting goods industry, and it's generated more than $20 million of free cash flow for the last four quarters. With a price-to-sales ratio in line with its historical levels, I think the company still has a sporting chance to outshine the market.


  • Hibbett Sporting Goods (NASDAQ:HIBB)
  • Dick's Sporting Goods (NYSE:DKS)
  • Sports Authority (privately held)
  • Cabela's (NYSE:CAB)
  • Gander Mountain (NASDAQ:GMTN)
  • Foot Locker (NYSE:FL)
  • Nike (NYSE:NKE)

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Fool contributor Rich Duprey does not own any of the stocks appearing in this article.