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Big 5 Sporting Goods Corp. Message Board

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  • Reply to

    Time to nibble on BGFV near 8.xx

    by joetong419 May 16, 2016 2:34 PM

    I agree this goes to $5-6 in the recession. I see no way they are profitable for the rest of the year. Last quarter was a 5 cent loss per share and I expect this to continue. So paying the dividend when you are not making money is not wise.
    My wife and I buy all of our sport shoes online.
    The newspapers yesterday reported that Sports Authority was unable to sell any of their stores in bankruptcy and would liquidate the inventory. This is going to take 3-6 months to sell off 450 stores of inventory. Frankly, I think Big 5's recent loss could widen if this much inventory impacts Big 5 more than all think.

    Not wise to buy at this price as the share price has been dropping all year, month after month and imagine it will continue until the end of the year.

  • Reply to

    Time to nibble on BGFV near 8.xx

    by joetong419 May 16, 2016 2:34 PM

    i bought a tiny bit. trading below book, nice div, making money. and with sports authority gone, one less competitor. i'll double down in the low 7's, but this is only a trade for me, as retail is very tough for long term.
    imho
    best

  • Reply to

    Time to nibble on BGFV near 8.xx

    by joetong419 May 16, 2016 2:34 PM

    So we will be looking at new cyclical lows in regard to share price. I was two of the units, one in Orange County and one in San Diego County. I purchased a pair of shoes for $65. It was mid day, and it did seem slow with some but not a lot of floor traffic.

  • Reply to

    Time to nibble on BGFV near 8.xx

    by joetong419 May 16, 2016 2:34 PM

    $5-6 before the next recession.

  • Reply to

    Increase In Labor Costs Killing BGFV

    by spanspur May 17, 2016 10:58 AM

    Though the wage increase did have some impact, the real issue is the constant dropping of the gross margin over the years, especially for the past 2.5 years. The wage may drop EPS for about $0.1/yr. But margin issue has a much significant impact of at least $0.5/yr. You can see these numbers in 10-K/10-Q. I hope some analyst would bring up the question on the next call and ask the management to explain different margin trajectory between BGFV and DKS/CAB/HIBB.

  • Cannot raise labor hourly costs 22% over the last 2 years and not have the operating results negatively impacted. Has the dividend been canceled here?

  • IMO should go no lower than 7.50, but upside only up to 10 next 3 months to August 31, 2016.
    All retail stores not doing good, just bottom fish.
    How low do many believe BGFV will go?

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  • Reply to

    Big 5 has Big 5 dividend

    by thostuart May 13, 2016 9:48 AM

    problem is they are not very profitable as earnings are declining and most retail stores are taking a big hit including Walmart, Nordstroms, etc.

  • Reply to

    Big 5 has Big 5 dividend

    by thostuart May 13, 2016 9:48 AM

    Big 5% + that is.

  • Big, fat and juicy dividend - love it

  • Reply to

    Sinking ship

    by ss_nandha Mar 3, 2016 10:50 AM

    you are right on. There is a ton of inventory to be liquidated out of these huge stores and why the CEO of Big Five thought it would be a sale for a couple of months. This could take six months before the inventory is gone which will clean out so much inventory that sales for the year will be lousy.

    Also, Nordstrom's, a very good retailer missed on earnings and the shares dropped almost 8 dollars today. Missing with retail stores is the kiss of death for the stock. I would suggest that shareholders dump there shares and buy back at $8 or $7 or $6 or $5 because the news is going to be bad again for the second quarter which is over in 6-7 weeks.

  • Reply to

    Sinking ship

    by ss_nandha Mar 3, 2016 10:50 AM

    You are right. It is going to take a year to sell out the inventory of the two competitors with 250 stores to empy and this is going to impact sales of Big 5 for the entire year of 2016. If management was smart it would have eliminated the dividend for the year instead of paying out cash when they will have losses all year as they are unable to compete with the stores being liquidated. Those stores are double or triple the size of a Big 5 store and they are wrong that the liquidations will take 3 months. It is not 250 stores being liquidated it is equal to 750 Big 5 stores being liquidated. This is going to take time.
    Management needs to be changed but that will not happen.
    Big 5 internet sales will not be able to compete against the Amazon model.
    Why are they paying dividends when they are not making money at Big 5. This is a recipe for further disaster.

  • Reply to

    Alarming trend

    by jjpcat May 5, 2016 8:27 PM

    bgfv isn't going anywhere, a store has poor numbers they can bug out overnight, buy off the lease and go, not any of the others.. since 1955 and great dividend for it's loyals.. buy, buy, buy

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  • Reply to

    Alarming trend

    by jjpcat May 5, 2016 8:27 PM

    Well, then how do you explain the fact that the margin of the 3 competitors I list all gradually went up for the past 10 years?

  • Reply to

    Alarming trend

    by jjpcat May 5, 2016 8:27 PM

    Thanks for the good post. I agree that their recent past does not look pretty. But I think alot of that was because Sports Chalet and Sports Authority, Wal Mart, and even Amazon were crowding their market. Now that SC and SA are getting out of the market we shoudl have a good run for a couple years. I also like the fact they now have some internet sales. MY guess is next couple quarters will be bad. But 4th quarter of this year will be a money maker. Skate to where the #$%$ is going.

  • Reply to

    Sinking ship

    by ss_nandha Mar 3, 2016 10:50 AM

    Folks who purchase over the internet generally purchase from internet-specific retailers, not brick and mortar retailers running a front-end to their warehouse. That's because the internet retailer is focused on their internet operations, brick and mortar operations do a poor job when it comes to online sales and order fulfillment.

    That being said, in most every case I've seen where brick and mortar stores attempt to move to internet fails. They will tout the growth in their internet sales quarterly, giving rosy announcements like "Our internet sales grew 80%", but that's 80% over some extremely low amount which they never tell you - all smoke and mirrors. Internet sales never amount to much in these cases.

    You should not buy this stock because of the dividend and perception that it will surely be paid going forward. If earnings do not rebound in the next few quarters, the dividend will certainly be reduced.

  • I found 4 public sport goods retail companies: BGFV, DKS, CAB, and HIBB. Between 2005 and 2015, the general trend of gross margin is down for BGFV. But it's up for all other 3 players. How could the management explain this? I don't think they can explain it away with competition. This is what really kills our earning. If this trend doesn't turn, we will be dead in 10 years.

    Also between 2005 and 2015, employee productivity (sale per employee) gain is 5%, 35%, 10%, and 8% for these 4 companies. Again, BGFV brings up the rear while DKS shoot to the moon.

    DKS and CAB operate much bigger stores. So I can understand why their productivity is better. But the average store footage of HIBB is only half of BGFV, yet the productivity is about the same between these 2 companies.

    The operating margin for these 4 companies are 2.6%, 7.8%, 8.1%, and 13.7%, respectively. It was 8% for BGFV in 2005 and it's negative for Q1/2016. The management obviously saw these awful trend and comparison. They brought in external consultants. But so far, nothing has changed. The bad trend continues in 2016 and BGFV is expected to report its worst EPS ever.

    I must say I wish I could rotate out of BGFV and into DKS. It's amazing that they can grow so rapidly while maintaining great margin. Our CEO keep saying that our unique business model would enable us to succeed. Well, 10-year of data clearly proves he is just lying.

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