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Big 5 Sporting (BGFV) to Post Q1 Earnings: What's in Store?

Zacks Equity Research

Big 5 Sporting Goods Corporation BGFV is slated to report first-quarter 2019 results on Apr 30, after the closing bell.

The company has witnessed a negative earnings surprise in two of the trailing four quarters, the average miss being 16.5%.

The Zacks Consensus Estimate for first-quarter earnings is pegged at 8 cents against a loss of 6 cents incurred in the year-ago quarter. Notably, estimates remained stable over the past 30 days. For quarterly revenues, the consensus mark stands at $246.6 million, indicating growth of 5.3% from the prior-year quarter figure.

Big 5 Sporting Goods Corporation Price and EPS Surprise

Big 5 Sporting Goods Corporation Price and EPS Surprise | Big 5 Sporting Goods Corporation Quote

Factors at Play

Big 5 Sporting’s efforts to expand store base and introduce technological advancements for improving services bode well. The company has also been undertaking initiatives to expand its production scale, and drive traffic and sales. In a bid to achieve the optimal balance between driving sales and maintaining margins, it is testing the pricing strategies.

Furthermore, the company is changing its advertising cadence and structure for more flexibility besides diversifying its marketing efforts across the print and digital platforms. Also, it has been reinforcing the value proposition to help improve its competitive position. These apart, management remains focused on managing the cost structure including efforts to lessen increased wage pressures for driving margins and profitability. Backed by all these efforts Big 5 Sporting is likely to witness solid top- and bottom-line performance in the to-be-reported quarter.

For first-quarter 2019, comps are projected to grow in the mid-single-digit range. Earnings per share are anticipated to be 4-10 cents, including an estimated favorable impact of the calendar shift of the Easter holiday from first-quarter 2018 and into second-quarter 2019.

However, sluggishness at the company’s hard good category due to persistent weakness in the firearm-related products remains a major concern and might hurt comps and sales in the to-be-reported quarter.

Additionally, the company is witnessing strained margins due to higher costs and lower merchandise margins. This, in turn, might weigh on the company’s profitability in the first quarter.

Zacks Model

Our proven model does not conclusively show that Big 5 Sporting is likely to beat estimates in the first quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Big 5 Sporting’s Zacks Rank #3 increases the predictive power of an earnings beat, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks Likely to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases:

Best Buy Co., Inc. BBY has an Earnings ESP of +0.31% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dillard's, Inc. DDS has an Earnings ESP of +3.95% and a Zacks Rank #3.

Ross Stores, Inc. ROST has an Earnings ESP of +2.20% and a Zacks Rank #3.

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