Needham & Company Bumps PT on Big 5 Sporting Goods (BGFV) Following Q2 Earnings

July 31, 2013 8:07 AM EDT Send to a Friend
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Price: $13.37 --0%

Rating Summary:
    1 Buy, 5 Hold, 1 Sell

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Needham & Company reiterated its Strong Buy rating and raised its price target on Big 5 Sporting Goods (NASDAQ: BGFV) from $26 to $27 following Q2 results, which were below their views but up sharply year-over-year.

Analyst Sean McGowan comments, "BGFV’s 2Q results were slightly below our expectations but up significantly YoY. Same-store-sales (SSS) grew 4.4%, which was
below our estimate (6.6%) and consensus (6.0%). 2Q sales benefitted from Easter falling in 1Q, but were offset somewhat by an unfavorable shift in the July 4th holiday further into 3Q; excluding these shifts, SSS improvements were smooth across months.
GMs rose 100 bps YoY to 33.2% of sales thanks in part to a 34 bps improvement in merchandise margin and ongoing expense leverage. SG&A costs leveraged 150 bps YoY to 28.8% of sales. EPS were $0.28 compared to our estimate of $0.29 and consensus
expectations of $0.26 (2Q12 EPS were $0.12). Management’s initial 3Q guidance calls for a comp store increase in the low-to-mid single digits with EPS of $0.40-$0.45. We are lowering our Street-high 2013 estimates slightly but still believe that BGFV can return
to historical operating margins, which averaged 7% from 2000-2006. We maintain our 2014 and 2015 EPS estimates, and our Strong Buy rating, and are raising our 12 month price target to $27."

The firm adjusted FY 2013 EPS from $1.45 to $1.40 and maintained FY 2014 at $1.75.

For an analyst ratings summary and ratings history on Big 5 Sporting Goods click here. For more ratings news on Big 5 Sporting Goods click here.

Shares of Big 5 Sporting Goods closed at $24.36 yesterday.


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Analyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change

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Needham & Company, Earnings

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