Bear of the Day: Big 5 Sporting Goods (BGFV)

Big 5 Sporting Goods (BGFV) posted a 0.5% decline in same-store sales during the second quarter of 2010, missing its own prediction of low-single digit growth. Consequently, the company slashed its earnings guidance for the second quarter to $0.20 – $0.23 per share from the earlier forecast of $0.24 – $0.30 per share.

Big 5 Sporting also encounters intense competition from national chains, mass merchandisers and regional stores, which exerts severe pressure on its profitability. Moreover, the seasonal nature of its business and risks associated with sourcing from foreign countries also undermine the company’s future operating performance.

Accordingly, we downgrade our recommendation on Big 5 Sporting Goods to Underperform from Neutral as we anticipate it to perform well below the broader market.

BIG 5 SPORTING (BGFV): Free Stock Analysis Report

About Zacks Investment Research 1767 Articles

Zacks Investment Research is one of the most highly regarded firms in the investment industry. In 1978 Zacks originated the concept of utilizing earnings estimates revisions to make profitable investment decisions. Zacks offers multiple investment products and services to help investors achieve superior returns.


Be the first to comment

Leave a Reply

Your email address will not be published.