Big 5 Sporting Goods Corp (BGFV) 2023 Q3 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the Big 5 Sporting Goods third-quarter 2023 earnings results conference call. Today's call is being recorded. With us today are Mr. Steve Miller, President and Chief Executive Officer; and Mr. Barry Emerson, Chief Financial Officer of Big 5 Sporting Goods.

美好的一天，女士們先生們。歡迎參加 5 強體育用品公司 2023 年第三季獲利電話會議。今天的通話正在錄音。今天與我們在一起的有總裁兼執行長 Steve Miller 先生；以及五大體育用品公司財務長 Barry Emerson 先生。

At this time, for opening remarks and introductions, I'd like to turn the conference over to Mr. Miller. Please go ahead, sir.

現在，我想將會議交給米勒先生進行開場發言和介紹。請繼續，先生。

Thank you, operator. Good afternoon, everyone. Welcome to our 2023-third-quarter conference call. Today, we will review our financial results for the third quarter of fiscal 2023 as well as provide an outlook for the fourth quarter. I will now turn the call over to Barry to read our Safe Harbor statement.

謝謝你，接線生。大家下午好。歡迎參加我們的 2023 年第三季電話會議。今天，我們將回顧 2023 財年第三季的財務業績，並對第四季進行展望。我現在將把電話轉給巴里，讓他閱讀我們的安全港聲明。

Thanks, Steve. Except for statements of historical facts, any remarks that we may make about our future expectations, plans, and prospects constitute forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in current and future periods to differ materially from forecasted results.

謝謝，史蒂夫。除歷史事實陳述外，我們對未來預期、計劃和前景所做的任何評論均構成根據 1995 年《私人證券訴訟改革法案》安全港條款作出的前瞻性陳述。前瞻性陳述涉及已知的資訊未知的風險和不確定性可能導致我們目前和未來期間的實際結果與預測結果有重大差異。

These risks and uncertainties include those more fully described in our annual reports on Form 10-K, our quarterly reports on Form 10-Q, and our other filings with the Securities and Exchange Commission. We undertake no obligation to revise or update any forward-looking statements that may be made from time to time by us or on our behalf.

這些風險和不確定性包括我們在 10-K 表中的年度報告、在 10-Q 表中的季度報告以及我們向美國證券交易委員會提交的其他文件中更全面描述的風險和不確定性。我們不承擔修改或更新我們或代表我們不時做出的任何前瞻性陳述的義務。

Thank you, Barry. Our third-quarter results came in slightly below our expectations, reflecting the mounting pressures on consumer discretionary spending. While the quarter started relatively well as we benefited from warm seasonal weather in July, our sales trending softened over the back half of the quarter. Beginning in August and even more so in September, we believe our consumer began to feel increasingly impacted by the ongoing pressures from persistent inflation, including heightened gas prices, rising interest rates and the resumption of student loan payments.

謝謝你，巴里。我們第三季的業績略低於我們的預期，反映出消費者可自由支配支出的壓力越來越大。雖然受益於 7 月份溫暖的季節性天氣，本季開局相對較好，但我們的銷售趨勢在本季度後半段有所放緩。從 8 月開始，甚至從 9 月開始，我們的消費者開始越來越感受到持續通膨帶來的持續壓力的影響，包括汽油價格上漲、利率上升和學生貸款支付的恢復。

In the face of these challenges, we have continued to focus on the aspects of the business that we can control such as optimizing merchandise margins, controlling operating expenses, and managing inventory. We are pleased with our team's execution and ability to drive improvements across each of these key metrics which helped generate positive bottom-line results despite significant top-line challenges.

面對這些挑戰，我們繼續專注於我們可以控制的業務方面，例如優化商品利潤、控制營運費用和管理庫存。我們對團隊的執行力和推動這些關鍵指標改進的能力感到滿意，儘管面臨重大的頂線挑戰，這仍然有助於產生積極的底線結果。

Net sales for the third quarter of 2023 were $239.9 million compared to $261.4 million in the third quarter of 2022, reflecting an 8.2% decrease in same-store sales. Transactions for the quarter were down high single digits, while the average ticket was up slightly. There were no material differences in sales across our major merchandise categories, footwear, apparel, and hardgoods with each down in the high single-digit range.

2023 年第三季的淨銷售額為 2.399 億美元，而 2022 年第三季為 2.614 億美元，同店銷售額下降 8.2%。本季的交易量下降了高個位數，而平均門票略有上升。我們的主要商品類別（鞋類、服裝和耐用品）的銷售額沒有重大差異，均出現高個位數下降。

In the face of the ongoing sales headwinds, we remain focused on officially managing our inventories and prioritizing merchandise margins to optimize gross profit dollars. At the end of Q3, our inventory was down 8% versus the prior year, reflecting our efforts to align our inventory with a challenging sales environment. As a result, we have not needed to be overly promotional for the sake of clearing merchandise, which has been helpful to our merchandise margins. For the quarter, we generated a 52-basis-point increase in merchandise margins versus the prior year period.

面對持續的銷售逆風，我們仍然專注於正式管理我們的庫存並優先考慮商品利潤率，以優化毛利。第三季末，我們的庫存比去年同期下降了 8%，這反映出我們努力調整庫存以適應充滿挑戰的銷售環境。因此，我們不需要為了清理商品而過度促銷，這對我們的商品利潤有幫助。本季度，我們的商品利潤率比去年同期成長了 52 個基點。

As inflation persists, managing operating costs within our control continues to be a key area of focus. Store labor is our largest operating expense. And we are pleased that despite significant wage inflation, we were able to reduce this key expense year over year by diligently managing store labor usage and being more targeted in tailoring store operating hours to local shopping patterns.

隨著通貨膨脹持續存在，將營運成本管理在我們的控制範圍內仍然是一個重點關注領域。商店勞動力是我們最大的營運支出。我們很高興的是，儘管工資大幅上漲，但我們能夠透過努力管理商店勞動力的使用以及更有針對性地根據當地購物模式調整商店營業時間來逐年減少這項關鍵費用。

Additionally, our expense structure continues to benefit from significantly reduced marketing spend. Expense management has always been one of our strengths. And now more than ever, we are focused on diligently managing expenses throughout our organization to mitigate widespread inflationary pressures.

此外，我們的費用結構持續受益於行銷支出的大幅減少。費用管理一直是我們的優勢之一。現在，我們比以往任何時候都更加重視在整個組織內勤奮管理支出，以減輕廣泛的通膨壓力。

Turning to current sales trends. The challenging consumer environment has persisted into the fourth quarter, and our October sales are running down approximately 10%. Over the balance of the quarter, we anticipate that our customers will continue to feel their wallets being squeezed throughout the holiday shopping season and will be carefully watching their discretionary spending.

轉向當前的銷售趨勢。充滿挑戰的消費環境一直持續到第四季度，我們 10 月的銷售額下降了約 10%。在本季度的剩餘時間裡，我們預計我們的客戶將在整個假期購物季繼續感覺到錢包受到擠壓，並將仔細關注他們的可自由支配支出。

With that said, we believe we have a compelling product assortment for the winter and holiday season that should resonate with shoppers. Our value-oriented price points should be particularly attractive in these times.

話雖如此，我們相信我們在冬季和假期季節擁有引人注目的產品種類，應該會引起購物者的共鳴。在這個時代，我們以價值為導向的價格點應該特別有吸引力。

Before turning the call over to Barry, I'd like to briefly comment on the reduction in our dividend that we announced today. While we improved our cash position over the course of the third quarter that have maintained a healthy balance sheet with no debt, we have proactively adjusted our dividend to ensure we have ample financial flexibility given the uncertainty of the duration of the macroeconomic headwinds our customers are facing. Even with the reduction, we believe that our dividend continues to provide a meaningful return for our shareholders. As we manage through this challenging economic environment, we remain committed to maintaining a healthy balance sheet.

在將電話轉給巴里之前，我想簡要評論我們今天宣布的股息減少。雖然我們在第三季改善了現金狀況，保持了健康的資產負債表，沒有債務，但考慮到客戶面臨的宏觀經濟逆風持續時間的不確定性，我們主動調整了股息，以確保我們擁有充足的財務靈活性。面對。即使減少，我們相信我們的股息將繼續為我們的股東提供有意義的回報。在我們應對這一充滿挑戰的經濟環境時，我們仍然致力於維持健康的資產負債表。

I'll now turn it over to Barry to provide additional details regarding our third-quarter performance and fourth-quarter outlook. Barry?

我現在將其轉交給巴里，以提供有關我們第三季度業績和第四季度前景的更多詳細資訊。巴里？

Thanks, Steve. Gross profit for the fiscal-2023 third quarter was $79.6 million, compared to gross profit of $86.6 million in the third quarter of the prior year. Our gross profit margin of 33.2% in the fiscal-2023 third quarter compared to 33.1% recorded in the third quarter of last year. The slight improvement in gross profit margin year over year primarily reflected the increase in merchandise margins that Steve noted, and extinguishment of certain real-estate-related liabilities partially offset by higher store occupancy and distribution expense including decreased costs capitalized into inventory as a percentage of net sales.

謝謝，史蒂夫。 2023 財年第三季的毛利為 7,960 萬美元，而上年第三季的毛利為 8,660 萬美元。 2023 財年第三季我們的毛利率為 33.2%，去年第三季為 33.1%。毛利率同比略有改善，主要反映了史蒂夫指出的商品利潤率的增加，以及某些房地產相關負債的消除，但部分被更高的商店佔用率和分銷費用所抵消，包括資本化成本佔庫存的百分比下降。淨銷售額。

Merchandise margins for the third quarter of fiscal 2023 increased 52 basis points versus the prior year period and continue to run several hundred basis points ahead of pre-pandemic levels, supported by the evolution of our pricing and motional strategy. Overall selling and administrative expense for the fiscal-2023 third quarter decreased $1.6 million versus the prior year. The year-over-year change primarily reflected lower employee labor and benefit-related expense, partially offset by higher legal expense associated with the lawsuit settlement. As a percent of net sales, SG&A expense was 31.9% in the fiscal-2023 third quarter versus 29.9% in the 2022 third quarter, reflecting the lower sales base.

在我們定價和動態策略演變的支持下，2023 財年第三季的商品利潤率比上年同期增長了 52 個基點，並繼續比大流行前的水平高出數百個基點。 2023 財年第三季的整體銷售和管理費用比前一年減少 160 萬美元。同比變化主要反映了員工勞動力和福利相關費用的減少，部分被與訴訟和解相關的法律費用增加所抵消。以淨銷售額的百分比計算，2023 財年第三季的 SG&A 費用為 31.9%，而 2022 年第三季為 29.9%，反映出銷售基礎較低。

Now, looking at our bottom line. Net income for the third quarter of fiscal 2023 was $1.9 million or $0.08 per diluted share. This compares to net income of $6.4 million or $0.29 per diluted share in the third quarter of fiscal 2022. Adjusted EBITDA totaled $7.4 million for the third quarter of fiscal 2023, compared to adjusted EBITDA of $13 million in the third quarter last year.

現在，看看我們的底線。 2023 財年第三季淨利為 190 萬美元，或攤薄後每股收益 0.08 美元。相較之下，2022 財年第三季淨利為640 萬美元，即稀釋後每股收益0.29 美元。2023 財年第三季調整後EBITDA 總計740 萬美元，而去年第三季調整後EBITDA 為1300 萬美元。

Briefly reviewing our 2023-full-first-nine-months results, net sales were $688.4 million, compared to net sales of $757.2 million in the same period last year. Same-store sales decreased 9.1% in the first nine months of fiscal 2023 versus the comparable period last year.

簡單回顧我們 2023 年前 9 個月的業績，淨銷售額為 6.884 億美元，而去年同期的淨銷售額為 7.572 億美元。 2023 財年前 9 個月的同店銷售額與去年同期相比下降了 9.1%。

Net income for the first 39 weeks of fiscal 2023 was $1.8 million or $0.08 per diluted share. This compares to net income for the first 39 weeks of 2022 of $24.4 million or $1.10 per diluted share. Adjusted EBITDA was $16 million for the 2023-year-to-date period, compared to adjusted EBITDA of $45.7 million in the comparable period last year.

2023 財年前 39 週的淨利為 180 萬美元，即稀釋後每股收益 0.08 美元。相比之下，2022 年前 39 週的淨利潤為 2,440 萬美元，即稀釋後每股收益 1.10 美元。 2023 年至今，調整後 EBITDA 為 1,600 萬美元，而去年同期調整後 EBITDA 為 4,570 萬美元。

Turning to the balance sheet. Our merchandise inventory at the end of the third quarter of fiscal 2023 decreased 8% year over year. This reduction reflects our efforts to manage inventory levels considering the soft sales environment, and we feel good about our inventory position as we move through fall and into the holiday season.

轉向資產負債表。截至 2023 財年第三季末，我們的商品庫存年減 8%。這一減少反映了我們考慮到疲軟的銷售環境而努力管理庫存水平，隨著秋季和假期的到來，我們對庫存狀況感覺良好。

Reviewing our capital spending, our CapEx excluding non-cash acquisitions totaled $8.2 million for the first nine months of fiscal 2023, primarily representing investments in store-related remodeling, distribution center equipment, computer leasehold improvements in computer hardware and software purchases. For the fiscal-2023 full year, we now expect CapEx in the range of $8 million to $12 million and anticipate opening two new stores and closing four stores, including one relocation, resulting in 430 stores in operation at the end of the year.

回顧我們的資本支出，2023 財年前9 個月，我們的資本支出（不包括非現金收購）總計820 萬美元，主要代表對商店相關改造、配送中心設備、電腦硬體和軟體採購的電腦租賃改進的投資。對於 2023 財年全年，我們目前預計資本支出在 800 萬至 1200 萬美元之間，並預計開設兩家新店並關閉四家店（包括一家搬遷店），到年底將有 430 家店開業。

Now, looking at our cash flow. Net cash provided by operating activities was $21.1 million in the first nine months of fiscal 2023. This compares to net cash used in operating activities of $29.9 million in the comparable period last year. The year-over-year improvement in our operating cash flow primarily reflected reduced funding of merchandise inventory and accrued expenses mainly related to performance-based incentive accruals, partially offset by lower net income this year.

現在，看看我們的現金流。 2023 財年前 9 個月，經營活動提供的淨現金為 2,110 萬美元。相較之下，去年同期經營活動使用的淨現金為 2,990 萬美元。我們經營現金流量的年比改善主要反映了商品庫存資金的減少和主要與基於績效的應計獎勵相關的應計費用的減少，部分被今年淨利潤的下降所抵消。

Our balance sheet at the end of the third quarter of fiscal 2023 remains healthy. We had zero borrowings under our credit facility and a cash balance of $17.9 million. And we currently expect our cash balance at the end of the fourth quarter to be largely consistent with the cash balance at the end of the third quarter. As Steve mentioned, the decision to reduce the dividend to $0.125 per quarter from $0.25 per quarter reflects our prudent approach to capital management in an effort to maintain a healthy financial condition amid an increasingly challenged macroeconomic backdrop.

截至 2023 財年第三季末，我們的資產負債表依然健康。我們的信貸安排下的借款為零，現金餘額為 1,790 萬美元。我們目前預計第四季末的現金餘額將與第三季末的現金餘額基本一致。正如史蒂夫所提到的，將股息從每季 0.25 美元減少到每季 0.125 美元的決定反映了我們對資本管理的審慎態度，以努力在面臨日益挑戰的宏觀經濟背景下保持健康的財務狀況。

Now, I'll spend a moment on guidance. For the fiscal-2023 fourth quarter, we expect same-store sales to decrease in the high single-digit to low double-digit range compared to the fiscal-2022 fourth quarter. Our same-store sales guidance reflects an expectation that macroeconomic headwinds will continue to impact consumer discretionary spending over the balance of the quarter. Fiscal-2023-fourth-quarter net loss per share is expected in the range of $0.20 to $0.35, which compares to fiscal-2022-fourth-quarter earnings per diluted share of $0.08.

現在，我將花一點時間進行指導。對於 2023 財年第四季度，我們預計與 2022 財年第四季相比，同店銷售額將在高個位數到低兩位數範圍內下降。我們的同店銷售指引反映了宏觀經濟逆風將在本季剩餘時間持續影響消費者可自由支配支出的預期。 2023 財年第四季每股淨虧損預計在 0.20 美元至 0.35 美元之間，而 2022 財年第四季攤薄後每股收益為 0.08 美元。

Finally, I'd like to briefly touch on seasonality factors that typically cause our fourth-quarter earnings to be lower than our third-quarter earnings. This dynamic results from a combination of seasonally lower sales volume in the first half of the fourth quarter until after Thanksgiving when holiday sales ramp up, as well as heightened promotional activity and higher expenses for advertising and increased labor hours during the fourth quarter.

最後，我想簡要談談通常導致我們第四季收益低於第三季收益的季節性因素。這種動態是由於第四季度上半年銷售季節性下降直至感恩節之後假期銷售增加，以及第四季度促銷活動增加、廣告費用增加以及勞動時間增加等綜合因素造成的。

That concludes our prepared remarks. Operator, we are now ready for any questions.

我們準備好的演講到此結束。接線員，我們現在已準備好回答任何問題。

Thank you. (Operator Instructions) Mark Smith, Lake Street Capital.

謝謝。 （操作員說明）Mark Smith，Lake Street Capital。

Hi, guys. First question for me. Just as we look at fourth quarter, what's -- what are your expectations on promotional environment for you guys and potential discounting here in Q4?

嗨，大家好。我的第一個問題。正如我們展望第四季一樣，您對第四季的促銷環境和潛在折扣有何期望？

Mark, we're going to -- our inventories are in great shape, so we don't feel compelled to be overly promotional. I would expect that we will be reasonably consistent with the last year. We're going to watch the marketplace and react accordingly if we sense that that's the correct step to take.

馬克，我們將——我們的庫存狀況良好，因此我們不會覺得有必要過度促銷。我預計我們將與去年保持相當一致。我們將觀察市場，如果我們認為這是正確的步驟，就會做出相應的反應。

Okay. And then, you said that all of your different segments sounded like during Q3 were all down in the high single-digit range on a comp basis. Any regions or segments, especially, as you look into Q4 that you're expecting maybe a falloff or any additional weakness in?

好的。然後，您說，在第三季度，您所有不同的細分市場聽起來都在比較基礎上下降在高個位數範圍內。任何地區或細分市場，特別是當您研究第四季度時，您預計可能會出現下滑或任何其他弱點？

I don't know that there's any aspect of our product category that we're anticipating any material falloff or weakness. A lot in the fourth quarter always revolves around weather and how that can influence the various categories. Positive winter weather is always most favorable to our apparel category. So we'll be obviously, hoping for the weather and watching that carefully.

我不知道我們的產品類別的任何方面我們預計會出現任何實質性的衰退或弱點。第四季的許多內容總是圍繞著天氣以及天氣如何影響各個類別。積極的冬季天氣總是對我們的服裝類別最有利。所以我們顯然會期待天氣並仔細觀察。

Okay. And then, the last question for me. As we think about -- you just cut the dividend here to maintain a healthy balance sheet. As we look at growth in new units next year, and I know you haven't guided this, but should we expect maybe even some pull back on relocations or any capital expenditures going towards new store growth?

好的。然後是我的最後一個問題。正如我們所想，您只是削減股息以維持健康的資產負債表。當我們考慮明年新店的成長時，我知道您沒有對此進行指導，但我們是否應該預期搬遷或用於新店成長的資本支出會有所回落？

No. Again, I wouldn't anticipate a material change from the direction that we took this year. And really, over the last couple of years, we have several stores in the pipeline. Honestly, a few stores that we anticipated would have opened this year that have rolled over into next, so we'll be opening some stores and rationalizing the store count with some closures as well.

不會。再說一次，我預計我們今年採取的方向不會有重大變化。事實上，在過去的幾年裡，我們已經開設了幾家商店。老實說，我們預計今年會開業的一些商店已經延續到明年，因此我們將開設一些商店，並關閉一些商店以合理化商店數量。

Okay. Great. Thank you.

好的。偉大的。謝謝。

Thank you, Mark.

謝謝你，馬克。

There are no further questions in the queue. I'd like to hand the call back to Steve Miller for closing remarks.

隊列中沒有其他問題。我想將電話轉回史蒂夫·米勒（Steve Miller）做總結發言。

All right. Thank you, operator, and thank you all for joining us on today's call. We appreciate your interest in Big 5 Sporting Goods and look forward to speaking with you again after the conclusion of our fourth quarter. Take care.

好的。謝謝接線員，也謝謝大家參加今天的電話會議。我們感謝您對 Big 5 Sporting Goods 的興趣，並期待在第四季度結束後再次與您交談。小心。

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.

女士們、先生們，今天的電話會議到此結束。感謝您的參與。此時您可以斷開線路，度過美好的一天。