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Big Five Sporting Goods (BGFV - Free Report) is a sporting goods retailer in the western US, operating 435 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 weak results. Net sales for Q4 fell to $242.9 million from $266.3 million a year ago. Same store sales decreased 9.4% compared to a 3.1% increase in same store sales for Q4 2016.

While the loss was narrower than the Zacks Consensus Estimate, revenues missed our estimate.

The CEO said, “Our performance was impacted by an extraordinarily challenging December period as a result of extremely unfavorable winter weather conditions in most of our markets. The significantly warmer than normal temperatures and one of the driest periods on record in our Western U.S. markets led to a nearly 50% decline in sales for our core winter product categories in December. “

“Sales throughout the quarter also continued to be impacted by reduced demand for firearm-related products."

Analysts have lowered their estimates after disappointing results and guidance.

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 had earlier benefited from liquidation of Sports Authority and Sport Chalet, their latest quarter reveals rising challenges.

While the stock has recovered significant after a sharp drop following earnings announcement, given Zacks Stock Rank of #5 (Strong Sell) it is better to avoid it for the time being.

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