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Bear of the Day: Big Five Sporting Goods (BGFV)

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Big Five Sporting Goods (BGFV - Free Report) is a sporting goods retailer in the western US, operating 433 stores in 11 states. They product lines include athletic shoes, apparel, accessories and a broad selection of outdoor and athletic equipment.

Disappointing Results

The retailer reported much worse-than-expected results for Q2. Adjusted earnings of 13 cents per share were significantly short of the Zacks Consensus Estimate of 19 cents. Sales also missed our estimates.

“After a solid start to the period, sales for our second quarter came in below expectations,” said the CEO. “During the third quarter, we expect sales comparisons to be pressured as we continue to cycle the lift in sales that we experienced last year as a result of the competitor store closures, while also operating in a challenging retail environment.”

Falling Estimates

Analysts have lowered their estimates significantly after disappointing results and guidance. Zacks Consensus Estimates for the current and next fiscal year have plunged to $1.03 per share and $1.05 per share from $1.23 and $1.34 respectively, before the results.

The Bottom Line

Most retailers are going through a lot of pain thanks to the rising trend for online shopping, particularly on Amazon. While this retailer was doing quite well earlier this year as they seem to have also benefited from liquidation of Sports Authority and Sport Chalet, their latest quarter reveals rising challenges.

The stock is now down more than 45% year-to-date but a rebound doesn’t appear likely anytime soon given Zacks stock rank of #5 (Strong Sell) and industry and sector ranks in the bottom 11% and 6% respectively.

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