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Factors Likely to Shape Big 5 Sporting's (BGFV) Q4 Earnings

Zacks Equity Research

Big 5 Sporting Goods Corporation BGFV is slated to report fourth-quarter 2018 results on Feb 26.

The company has witnessed a negative earnings surprise in the preceding two quarters, with a trailing four-quarter average miss of 14.2%.

Big 5 Sporting Goods Corporation Price and EPS Surprise

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

The Zacks Consensus Estimate for the quarter under review is pegged at a loss of 16 cents, wider than a loss of 10 cents incurred in the year-ago quarter. Notably, estimates remained stable over the past 30 days. Management projects a loss of 15-17 cents per share for the fourth quarter.

Let’s See How Things Are Shaping Before 4Q18 Release

Big 5 Sporting has been reporting soft same-store sales (comps) for a while now mainly owing to weakness at its hardgoods category. Recently, the company has released its sales numbers for the fourth quarter of 2018. Although the company’s overall comps for the quarter increased 1.1%, comps fell in low-single-digit range at the hardgoods category. Comps growth was backed by comps increase in high-single-digit range at the apparel category and a marginal rise at the footwear category.

Further, the company witnessed slight increases in customer transactions and average sale in the fourth quarter. As a result, it reported quarterly net sales of $247.1 million, up 1.7% from the year-ago period. Robust demand for winter products, owing to favorable weather conditions across many of its markets aided the top-line performance.

Additionally, Big 5 Sporting’s commitment toward expanding store base and introducing technological advancements to enhance services appears encouraging.

However, the company’s merchandise margins fell nearly 11 basis points. Big 5 Sporting is also grappling with strained margins for the past few quarters now. This remains a concern for the to-be-reported quarter as well.

Zacks Model

Our proven model does not conclusively show that Big 5 Sporting is likely to beat estimates in the fourth 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 #2 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:

Abercrombie & Fitch ANF has an Earnings ESP of +0.94% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Eagle Outfitters, Inc. AEO has an Earnings ESP of +0.60% and a Zacks Rank #2.

The Home Depot, Inc. HD has an Earnings ESP of +1.22% and a Zacks Rank #3.

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The Home Depot, Inc. (HD) : Free Stock Analysis Report
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Big 5 Sporting Goods Corporation (BGFV) : Free Stock Analysis Report
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