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Big 5 Incurs Wider Y/Y Loss in Q2 Amid Weak Sales, Plans Buyout
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Shares of Big 5 Sporting Goods Corporation (BGFV - Free Report) have edged up 0.7% since the company reported its earnings for the fiscal second quarter ended June 29, 2025, outperforming the S&P 500’s 2.4% decline over the same period. However, over the past month, the stock has remained flat, while the S&P 500 has risen by 0.4%, indicating a mixed investor sentiment surrounding the retailer's recent performance.
For the second quarter of fiscal 2025, Big 5 incurred a net loss of $1.11 per diluted share, wider than 46 cents per share in the year-ago period.
Net sales of $184.9 million denoted a decrease of 7.5% from $199.8 million in the same quarter of the prior year. This decline in top-line performance was primarily attributed to a 6.1% decrease in same-store sales. Gross profit also fell to $52.2 million from $58.7 million, reflecting a margin contraction from 29.4% to 28.2%.
The company incurred a net loss of $24.5 million, wider than a net loss of $10 million in the year-ago period.
Adjusted EBITDA for the quarter was a negative $14.7 million, significantly worse than the negative $8.7 million reported a year earlier. The steep decline in profitability underscores the persistent challenges the company faces in navigating macroeconomic pressures and shifting consumer behaviors.
Big 5 Sporting Goods Corporation Price, Consensus and EPS Surprise
Operating loss widened to $23.2 million from $13.5 million in the prior year quarter. Selling and administrative expenses remained at $75.4 million versus $72.2 million, suggesting that cost controls were not sufficient to offset the decline in sales.
Interest expense rose substantially to $1.3 million from just $0.1 million in the second quarter of 2024, adding further pressure to the bottom line. The company attributed part of its net loss to $2.8 million in merger-related expenses and a $1.3 million non-cash impairment charge for underperforming stores.
From a balance sheet perspective, Big 5 ended the quarter with $71.4 million in borrowings under its $150 million credit facility and had $4.9 million in cash. Merchandise inventories increased slightly to $283.3 million, up from $260.3 million at the end of 2024.
Management Commentary
CEO Steven G. Miller acknowledged the quarter’s disappointing results, citing continued macroeconomic and geopolitical headwinds that weakened consumer discretionary spending. He emphasized that the company remains focused on liquidity management and cost efficiency, especially in light of the proposed acquisition by a private equity group.
Management highlighted the absence of an income tax benefit this quarter as a notable factor in the widened net loss. In the same quarter last year, the company had received a $3.6 million tax benefit, which had helped to partially offset operating losses.
Headline Numbers Influenced by One-Time Charges and Store Impairments
In addition to weak demand, the headline loss figures were heavily influenced by non-operating expenses. The company booked $2.8 million in transaction-related charges and a $1.3 million impairment for certain underperforming locations. These costs, though non-recurring, underscore the challenges of managing a legacy retail footprint in a rapidly evolving consumer landscape.
Furthermore, Big 5's gross margin was affected by higher merchandise costs and a more promotional pricing environment, which eroded profitability despite stable administrative expenses.
Other Developments
In a significant strategic move, Big 5 entered into a definitive merger agreement on June 30, 2025, with a partnership comprising Worldwide Golf and Capitol Hill Group. The deal will see the acquirers purchase all outstanding shares of Big 5 in an all-cash transaction.
As a result of the agreement, Big 5's stock is expected to be delisted from Nasdaq in the second half of 2025, and the company will transition into a private entity, pending shareholder approval and customary closing conditions.
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Big 5 Incurs Wider Y/Y Loss in Q2 Amid Weak Sales, Plans Buyout
Shares of Big 5 Sporting Goods Corporation (BGFV - Free Report) have edged up 0.7% since the company reported its earnings for the fiscal second quarter ended June 29, 2025, outperforming the S&P 500’s 2.4% decline over the same period. However, over the past month, the stock has remained flat, while the S&P 500 has risen by 0.4%, indicating a mixed investor sentiment surrounding the retailer's recent performance.
For the second quarter of fiscal 2025, Big 5 incurred a net loss of $1.11 per diluted share, wider than 46 cents per share in the year-ago period.
Net sales of $184.9 million denoted a decrease of 7.5% from $199.8 million in the same quarter of the prior year. This decline in top-line performance was primarily attributed to a 6.1% decrease in same-store sales. Gross profit also fell to $52.2 million from $58.7 million, reflecting a margin contraction from 29.4% to 28.2%.
The company incurred a net loss of $24.5 million, wider than a net loss of $10 million in the year-ago period.
Adjusted EBITDA for the quarter was a negative $14.7 million, significantly worse than the negative $8.7 million reported a year earlier. The steep decline in profitability underscores the persistent challenges the company faces in navigating macroeconomic pressures and shifting consumer behaviors.
Big 5 Sporting Goods Corporation Price, Consensus and EPS Surprise
Big 5 Sporting Goods Corporation price-consensus-eps-surprise-chart | Big 5 Sporting Goods Corporation Quote
Other Key Business Metrics
Operating loss widened to $23.2 million from $13.5 million in the prior year quarter. Selling and administrative expenses remained at $75.4 million versus $72.2 million, suggesting that cost controls were not sufficient to offset the decline in sales.
Interest expense rose substantially to $1.3 million from just $0.1 million in the second quarter of 2024, adding further pressure to the bottom line. The company attributed part of its net loss to $2.8 million in merger-related expenses and a $1.3 million non-cash impairment charge for underperforming stores.
From a balance sheet perspective, Big 5 ended the quarter with $71.4 million in borrowings under its $150 million credit facility and had $4.9 million in cash. Merchandise inventories increased slightly to $283.3 million, up from $260.3 million at the end of 2024.
Management Commentary
CEO Steven G. Miller acknowledged the quarter’s disappointing results, citing continued macroeconomic and geopolitical headwinds that weakened consumer discretionary spending. He emphasized that the company remains focused on liquidity management and cost efficiency, especially in light of the proposed acquisition by a private equity group.
Management highlighted the absence of an income tax benefit this quarter as a notable factor in the widened net loss. In the same quarter last year, the company had received a $3.6 million tax benefit, which had helped to partially offset operating losses.
Headline Numbers Influenced by One-Time Charges and Store Impairments
In addition to weak demand, the headline loss figures were heavily influenced by non-operating expenses. The company booked $2.8 million in transaction-related charges and a $1.3 million impairment for certain underperforming locations. These costs, though non-recurring, underscore the challenges of managing a legacy retail footprint in a rapidly evolving consumer landscape.
Furthermore, Big 5's gross margin was affected by higher merchandise costs and a more promotional pricing environment, which eroded profitability despite stable administrative expenses.
Other Developments
In a significant strategic move, Big 5 entered into a definitive merger agreement on June 30, 2025, with a partnership comprising Worldwide Golf and Capitol Hill Group. The deal will see the acquirers purchase all outstanding shares of Big 5 in an all-cash transaction.
As a result of the agreement, Big 5's stock is expected to be delisted from Nasdaq in the second half of 2025, and the company will transition into a private entity, pending shareholder approval and customary closing conditions.