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    BIG 5 SPORTING GOODS (BGFV)

    BGFV Q3 2024: Posts $29.9M Net Loss, Gross Margin Drops to 29.1%

    Reported on Oct 29, 2024 (After Market Close)
    Pre-Earnings Price$1.89Last close (Oct 29, 2024)
    Post-Earnings Price$1.58Open (Oct 30, 2024)
    Price Change
    $-0.31(-16.40%)

    What went well

    • Sequential Sales Improvement: Management highlighted consistent quarter-over-quarter sequential improvement in same-store sales, suggesting an underlying rebound in consumer demand despite current macroeconomic headwinds.
    • Effective Inventory & Store Strategy: The disciplined reduction in inventory (down 8.7% year-over-year) and proactive store optimization—opening new stores while closing underperforming ones—positions the company to swiftly capitalize on market opportunities as conditions improve.
    • Cost & Expense Management: The focus on managing operating expenses and margins amid economic challenges indicates potential for improved profitability as sales stabilize.

    What went wrong

    • Macroeconomic Headwinds: Management noted that persistent economic challenges have led to declining net sales and same-store sales (down 7.5% in Q3 and forecast to remain flat to negative in Q4), suggesting that ongoing weak consumer spending could continue to pressure overall performance ** **.
    • Weak Profitability Trends: The company reported a net loss of $29.9 million in Q3, a significant decline in gross profit margin (from 33.2% to 29.1%), and negative adjusted EBITDA, underlining ongoing operational challenges that could worsen under a slow recovery .
    • Operational and Inventory Pressure: Despite a disciplined reduction in inventory by 8.7% to align with soft sales, the need to aggressively manage pricing and costs while coping with seasonal challenges (e.g., compressed holiday season due to Thanksgiving timing) adds further downside risk ** **.

    Q&A Summary

    1. No Q&A
      Q: Were there any Q&A questions during this call?
      A: The transcript only includes prepared remarks with management’s narrative on sales, margins, and outlook, and does not present any Q&A questions or responses during the call.

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