El Segundo, CA-based Big 5 Sporting Goods Inc. (BGFV Quick QuoteBGFV - Free Report) seems a good option at the moment for investors seeking growth as the stock price has been ticking up since the beginning of June and has gathered further pace after the company’s robust second-quarter 2016 results. The stock has lapped a solid growth of over 43% in the last three months and 23% since the earnings release on Aug 2.

Big 5 Sporting posted a strong second-quarter 2016 as top and bottom-lines topped estimates. Earnings gained from better-than-expected sales, flat merchandise margins and tight control on inventory and expenses, despite the highly competitive and promotional retail environment, thanks to the liquidation efforts of Sports Authority and Sport Chalet. Top-line growth stemmed from calendar shift due to 53 weeks in 2015, which led 2016 to start a week later. This resulted in additional sales from the pre-Fourth of July holiday sales moving into second quarter in this year, which appeared in third quarter last year. Also, the calendar shift moved the Easter Holiday store closing to the first quarter this year against second quarter last year. The company’s second-quarter net sales gained from these shifts by about $6.8 million.

Further, the company’s third quarter started on a solid note as evident from robust comps growth so far in the quarter that gained from the closing of several rival stores in its markets. This led customers to acknowledge the ease of shopping at Big 5 Sporting, given its wide range of product assortments and value. Going forward, the company remains keen on making the most of the opportunities available due to this industry consolidation by focusing on its merchandise mix and stepping up promotional activities. Hence, the company provided an optimistic outlook for the third quarter.

Consequently, the Zacks Consensus Estimate of for fiscal 2016 and 2017 trended up. Estimates rose 17.4% to 54 cents for fiscal 2016 and 15.8% to 66 cents for fiscal 2017, in the last seven days.

Also, Big 5’s merchandising plans, eCommerce growth and extensive store network that help it capture market share and fuel growth, inspire optimism. Further, this Zacks Rank #2 (Buy) company leverages an extensive network of stores for effective penetration into its target markets with an aim to generate healthy sales and increase market share. The company expects to open 5−8 stores in 2016.

Simultaneously, Big 5 Sporting’s strong balance sheet provides it with the financial flexibility to drive future growth. The company remains committed toward enhancing shareholder value via share buybacks and dividend payouts.

Though the second-quarter results ebbed over all hurdles, the company’s comps remained soft, stemming from a fall in customer transactions. Further, the company expects the shift of the pre-fourth of July holidays sales to hurt its third-quarter sales and earnings. Also, the competitive and promotional environment due to the industry consolidation will continue to pose challenges.

While the aforementioned drawbacks indicate some weakness in comps and sales for the upcoming quarter, we believe the company is poised to grow from its strategic initiatives over the long term.

Stocks that Warrant a Look

Some better-ranked stocks in the same industry include Barnes & Noble Inc. , ULTA Salon, Cosmetics & Fragrance, Inc. (ULTA Quick QuoteULTA - Free Report) and Five Below Inc. (FIVE Quick QuoteFIVE - Free Report) , all holding a Zacks Rank #2.

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