Player Avatar NetscribeRetail (91.87) Submitted: 1/8/2007 7:18:16 AM : Outperform Start Price: $19.35 BGFV Score: -80.02

Big Things Expected from Big 5!!!

Big 5 Sporting Goods operates as a sporting goods retailer offering athletic shoes, apparel and accessories, as well as a selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, snowboarding, and in-line skating. The company operates 334 stores across 10 U.S states.

The $19 billion US athletic sport shoe market is the world’s largest and constitutes 47% of the global market. Footwear market is expected to increase 10.2% in value by 2008 and Athletic footwear comprises 35% of the total footwear purchases. This denotes a good picture for the company, which derives over 30% of its revenues from athletic and sport footwear. The third quarter performance of the company has been good with about 8% rise in the top-line and positive same-store sales across all their lines of business. Impressively, same-store sales, have been positive since past 43 consecutive quarters. On the expansion front, they have opened 10 stores in this fiscal and expect to increase its store base by roughly 6% annually, by opening 9 new stores in the next quarter. The company has maximum stores in California with further plans to explore opportunities there.

Additionally, the company earns the best returns on equity in the industry.   Driven by the results, management expects over 7% rise in full year net earnings. Furthermore, management has been able to reduce its debt level despite store openings and dividend payouts. Also, company has achieved consistent revenue growth over the years. In future, company expects to enhance their operating efficiencies from the Californian distribution centre. In the light of all these facts, the stock price is expected to surge.

Member Avatar NetscribeRetail (91.87) Submitted: 5/31/2007 7:55:06 AM
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Big 5 Sporting Goods Corporation (BGFV) drives 45% of its sales through weekly advertising circulars that highlights its differentiated and value price point product range. Almost half of BGFV’s merchandise is special make-up, exclusive product, closeout or private-label, allowing for a competitive edge despite heavy store overlap with Wal-Mart, The Sports Authority, Sport Chalet, GI Joe’s and others.

BGFV occupies a distinctive value in niche market where it can avoid competing directly with any of the major players in the sporting goods retail space. This enables BGFV to co-exist and compete effectively with both Wal-Mart at the value end as well as more premium sporting goods retailers such as The Sports Authority and Sport Chalet.

With over 800 vendors during 2006, BGFV’s differentiated merchandising strategy allows it to escape great dependence on a handful of powerful brands, a common problem for most other sporting goods retailers. BGFV’s value-oriented merchandising makes the format relatively less vulnerable to macro factors such as gasoline price inflation or a general slowdown in consumer spending. BGFV is considering ways to back-haul product on the return trip. This move could help offset continued pressure from energy cost inflation and thus reduce its distribution expenses.

For the fiscal 2007 first quarter, net sales increased by 4.7%, with Same store sales increasing by 1%. Net income increased to $7.6 million, or $0.33 per diluted share, from $5.9 million. The Company anticipates opening approximately 20 new stores, net of relocations, during fiscal 2007. Considering the fundamental outlook, the shares of Big 5 Sporting Goods Corporation offers good investment opportunity for investors.

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