Retailer Big 5 Sporting Goods (NASDAQ:BGFV) sported a big 4% increase in same-store sales in the fourth quarter. That performance capped off 2006, a big year for the sporting-goods retailer by just about every measure. Not the best year, mind you -- just a bigger one.
For example, sales for the full year grew to $876.8 million, a 7.7% increase. That's not as great as could have been hoped for. The fourth quarter, after all, saw just a 7% increase, even though it included the important Christmas season. But after stumbling badly in 2005, Big 5 seems to have found its stride again.
Same-store sales, which track sales at stores open for at least a year and are considered an important retail-industry metric for measuring company performance, have also recorded steady improvement all year long. The fourth quarter also marked the company's 44th consecutive quarter of positive comps growth, a not-too-shabby milestone.
Same-Store Sales Growth
| 2006 | 2005 | 2004 | |
|---|---|---|---|
| Q1 | 5.3% | 1.7% | 5.2% |
| Q2 | 2.9% | 2.7% | 3.9% |
| Q3 | 3.8% | 3.8% | 3.6% |
| Q4 | 4.2% | 1.5% | 2.6% |
Sales still lag where they were two years ago, when Big 5 notched nearly $1.35 billion in sales, but they show healthy improvement. Despite the unseasonably warm winter weather that has affected some retailers, such as Quiksilver (NYSE:ZQK), Big 5 was still able to move its winter apparel, which itself seems to be an accomplishment. Although ski maker K2 (NYSE:KTO) was also able to register strong sales growth in the quarter for its hard goods, it saw a decline in its winter apparel, particularly its Marmot Mountain line of outdoor clothes.
That seems to make Big 5's achievement all that more notable. It was able to move all three major segments of items it sells: shoes, hard goods, and apparel. Part of that has to do with location. Big 5 has 344 stores in 10 western states, and those states had more favorable winter-weather patterns than the rest of the country. Retailers such as Quiksilver and K2 have a more national and international presence and were affected by warmer weather in the east as well as particularly unseasonably warm weather in Europe.
Net income grew 25% over the year-ago period, to come in at $9.6 million, or $0.42 per share. A nearly $2 million reduction in distribution-center costs helped that improvement. Big 5's new facility had been a drag on performance earlier in the year, but the company seems to have worked that out. However, its gains were partially offset by increases in inventory cost capitalization, which have plagued Big 5's performance all year.
Big 5's results seem to mirror those reported by Sports Chalet (NASDAQ:SPCHB) last month. Next week, Dick's Sporting Goods (NYSE:DKS) will announce its results, and Gander Mountain (NASDAQ:GMTN) will follow soon as well. Because those companies also have national footprints, we'll get to see whether the industry follows Quiksilver's slippery slope or whether it falls in line behind Big 5's bigger quarter.
For more box scores on sporting goods retailers, check out:
- K2 Not Taking a Powder
- Foolish Forecast: Quiksilver Stumbles on the Slopes
- Big Five's Gloomy Forecast
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Fool contributor Rich Duprey owns shares of K2 but none of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.
