Big 5 Sporting Goods

Big 5 Sporting Goods

Big 5 Sporting Goods Jonathan Poland

Big 5 Sporting Goods Corporation (BGFV) is a retailer of sporting goods in the western region of the United States. The company offers a variety of products, including athletic shoes, apparel, and accessories, as well as outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, and winter and summer recreation. Additionally, the company provides its own private label items, such as shoes, apparel, camping equipment, fishing supplies, and snow sport equipment, which are sold under its own trademarks, including Golden Bear, Harsh, Pacifica, and Rugged Exposure. As of May 03, 2022, Big 5 Sporting Goods Corporation operated 431 stores and an e-commerce platform under the same name. The company’s headquarters are located in El Segundo, California. Its founding dates back to 1955.

as of February 15, 2023

Big 5 is under a ton of pressure right now. Traders have amassed a 20% short position in the company. I would imagine stemming from the $300+ million in total debt and just $34 million in cash. At the bottom of Covid in April 2020 would have been the time to buy in, with the stock rising 40x at its peak and still up 10x now. Unlike its larger competitor Hibbett, Big 5 hasn’t used excess earnings to grow, but to give back to shareholders in a pretty solid quarterly dividend. Big 5 has booked over $300 million in net profit since 2012 through operational efficiency. In other words, it’s squeezing out more from slightly higher revenue. This is not a growth story, it’s a dividend trade.

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