Big 5 Sporting Goods Corporation (NASDAQ:BGFV) Posts Revenues Of $228 Million In Q2 2020
Big 5 Sporting Goods Corporation (NASDAQ:BGFV) expects to report diluted earnings per share of up to $0.50 in Q2 2020. Its net sales declined by 5.39% to $228 million in Q2 2020. The company strengthened its margins in May and June 2020.
According to CEO and Chairman of Big 5, Steven G. Miller, the company reduced spending and posted better performance in Q2 2020. It is on the backdrop of improved sales and enhanced margins from the merchandise.
Operated with a reduced store count
Big 5 worked reduced store count in the first half of Q2 because of ongoing coronavirus crisis. As a result, its sales declined by 28.2% in Q2. After reopening, the company increased sales by 15.5% in the second half of Q2 and realized enhanced margins from the merchandise. Big 5 expect to maintain higher margins from the merchandise and positive sales growth into Q3 2020.
Steven said the team comprising purchase and distribution sections at Big 5 performed very well by responding to the demand from consumers and utilizing the existing partnerships with vendors despite the challenges posed by COVID-19 pandemic to boost revenues. The field and store services personnel put in tremendous efforts to serve the communities adhering to the strict coronavirus related safety measures. Big 5 stopped issuing annual pay increase to its teams because of uncertainty related to ongoing coronavirus.
Same-store sales reduced by 4.2%
The same-store sales are dropped by 4.2% in Q2 2020. It saved operating expenses by reducing the costs of advertising, payroll, and rent abatement.
In Q1, the company operates 431 stores after closing the three stores. It expects to shutdown another two stores this year.
Setback for sports leagues in the US
The risks related to COVID-19 and racial injustice movement casts a shadow on sports leagues in the US. It will play a spoilsport on sports goods retailers like Big 5. Also, several players are inclined to participate in sports events because of health risks.
Rob Manfred, MLB Commissioner, said the baseball season this year is in jeopardy because of the bitter dispute with the unions. Players like Kyrie Irving wanted to make changes in the league before restarting the play.