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Big 5 Q1 sales lower than expected

EL SEGUNDO, Calif. -- Big 5 Sporting Goods reported that for the fiscal 2011 first quarter, net sales were $221.1 million, compared with net sales of $218.5 million for the first quarter of fiscal 2010. Same-store sales decreased 0.9% for the first quarter of 2011 versus the comparable period in the prior year. This compares to a same-store sales increase of 2.4% in the first quarter of 2010. Sales results in fiscal 2011 reflect a benefit over the prior year from the calendar shift of the Easter holiday, during which the company's stores are closed, out of the first quarter and into the second quarter this year, Big 5 reported.

Net income for the first quarter of fiscal 2011 was $2.8 million, or 13 cents per diluted share, compared with net income of $5 million, or 23 cents per diluted share, for the first quarter of fiscal 2010.

"Our sales results for the first quarter were at the lower end of our guidance range and reflect continued macroeconomic weakness in our markets," said Steven Miller, chairman, president and CEO. "Sales were negatively impacted by a decrease in customer traffic, as we believe many of our consumers reduced purchases of discretionary items in response to the challenging economic environment, characterized by rising gas prices and high unemployment. Earnings were lower than our previous expectations primarily due to higher than anticipated expenses associated with employee benefits, including workers' compensation, health and welfare and California unemployment taxes."

During the first quarter of fiscal 2011, the company opened two new stores, both of which were relocations, and closed two stores as part of relocations that began in late 2010. The company ended the fiscal 2011 first quarter with 396 stores and said it anticipates closing one store during the fiscal 2011 second quarter as part of a relocation that began in late 2010. Excluding stores closed as part of relocations that began last year, Big 5 said it currently expects to open between 10 and 15 net new stores during fiscal 2011.

For the fiscal 2011 second quarter, Big 5 said it expects same-store sales in the flat to negative low single-digit range and earnings per diluted share in the range of 6 cents to 14 cents. For comparative purposes, the company's earnings per diluted share for the second quarter of fiscal 2010 were 22 cents.