Zacks Investment Research upgraded shares of Big 5 Sporting Goods Corporation (BGFV) from UNDERPERFORM to NEUTRAL on March 29, 2012, with a target price of $8.50.
Big 5 Sporting's fourth-quarter 2011 earnings of $0.05 per share beat the Zacks Consensus Estimate of $0.04, but dropped substantially from $0.25 earned in the prior-year quarter. The decline was primarily attributable to a 2.1% fall in same-store sales along with lower merchandise margins and increased selling and administrative expenses. Accordingly, the company has pegged same-store sales in a negative low single-digit range and anticipates earnings per share to come in the band of $0.00 to $0.06 per share for first-quarter 2012, reflecting a sharp decline from the prior-year quarter. However, we believe the company's top line will improve in future with the strategy of resuming the store expansion program. Moreover, the company's new business intelligence system and distribution channel will help in reducing operating expenses significantly. Currently, we maintain a long-term Neutral recommendation on the stock.
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