The Big 5 name is derived from its start in 1955 as five Army-Navy surplus stores in Southern California. In 1988, Sportswest and Sportsland were acquired from Pay 'n Save.
Big 5 Sporting Goods Corporation operates as a sporting goods retailer in the western United States. The company offers athletic shoes, apparel, and accessories, as well as a selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, winter and summer recreation, and roller sports. It also provides private label items, such as shoes, apparel, camping equipment, fishing supplies, and snow sport equipment. The company sells private label merchandise under its own trademarks comprising Golden Bear, Harsh, Pacifica, and Rugged Exposure; and licensed trademarks, including Beach Feet, Bearpaw, Body Glove, Morrow, and The Realm. As of January 1, 2017, it operated 432 stores and an e-commerce platform under the Big 5 Sporting Goods name. Big 5 Sporting Goods Corporation was founded in 1955 and is headquartered in El Segundo, California.
(Summary) (Company) (Chart)
14 May 2017
1yr Target $17.60
Payout Ratio 56.07%
1yr Cap Gain 27.53%
1yr Tot Return 31.87%
EPS (ttm) $1.07
EPS next yr $1.27
Forward P/E 10.89
EPS next 5yr 15.00%
1yr Price Support $19.05
Market Cap $314.64 Mil
Revenues $1.04 Bil
Earnings $23.30 Mil
Profit Margin 2.21%
Quick Ratio 0.20
Current Ratio 1.90
1yr RevGR -0.78%
3yr RevGR 0.92%
5yr RevGR 2.50%
1yr EarnGR 10.00%
3yr EarnGR -15.23%
5yr EarnGR 7.75%
1yr DivGR 31.25%
3yr DivGR 9.38%
5yr DivGR 11.84%
- 1955: Big 5 is founded operating as "Big 5 Stores", under the original corporate name United Merchandising Corp.
- 1963: Trade name is changed to "Big 5 Sporting Goods" as the chain specializes in sporting goods
- 1971: Thrifty Drug Stores acquires Big 5 Sporting Goods
- 1992: Big 5 is acquired in a management-led buyout financed by Leonard Green & Partners
- 1997: The Company is recapitalized, with majority ownership passing to employees
- 2002: Big 5 goes public
- 2010: Big 5 turns 55
Big 5 Founded in 1955. Big 5 was founded in September 1955 by Maurie I. Liff, Harry A. Liff and Robert W. Miller, father of current Chief Executive Officer (CEO) Steven G. Miller. The Company originally operated five stores in downtown Los Angeles, Burbank, Inglewood, Glendale, and San Jose, California under the trade name "Big 5 Stores."
During the early years, Big 5 concentrated on World War II army surplus items, as well as tents and air mattresses the Company manufactured itself, plus assorted house wares and hand tools. From the earliest days of the chain Big 5 used print advertisements. Consistently advertising on the back page of the main news section of the Los Angeles Times, customers grew accustomed to looking there for weekly specials. Sporting goods soon became part of the product mix, a natural for the highly active population of Southern California. In fact, sports merchandise became so popular that management decided to specialize in it, and in December, of 1963 the Company changed its trade name to "Big 5 Sporting Goods."
Thrifty Drug Stores Acquires Big 5 in 1971. By March 1971, Big 5 had grown to 19 stores, at which point the Company was acquired by Thrifty Drug Stores, the West Coast's largest chain of drug stores. Big 5 operated as a subsidiary of Thrifty for the next 21 years. With Robert Miller still leading the Company he helped found, Big 5 continued to prosper. By 1992, Big 5 had grown to 140 stores in California, Nevada, and Washington. To support the Company's growth, the company built a 440,000 square foot distribution center in Fontana, California that was twice the size of their previous facility.
Big 5 Is Acquired By Leonard Green & Partners in 1992. In 1992, Company management acquired Big 5 in conjunction with Leonard Green & Partners, a Los Angeles private equity firm. Robert Miller continued as CEO and Chairman of Big 5, while his son, Steven, was named President and Chief Operating Officer. During the first year following the change of ownership, Big 5 opened ten stores, followed by 15 in both 1993 and 1994, and 19 units in 1995. In the process of expansion, the chain entered the new markets of Arizona and Idaho in 1993, and New Mexico, Oregon, and Texas in 1995.
Management Acquires Controlling Stake in 1997. In November 1997, the Millers led a management effort to acquire a controlling interest in the company by raising $250 million. With this transaction, many of the chain's employees had a financial interest in the company and a renewed commitment to make Big 5 Sporting Goods prosper.
Big 5 Goes Public in 2002. In June 2002, Big 5 held an initial public offering (IPO), resulting in over $100 million being raised to finance future growth. Management planned to continue their strategy of controlled expansion, especially in markets beyond California. To accommodate this growth, in 2005 Big 5 opened a nearly one million square foot automated, state-of-the-art distribution center in Riverside, California. Today, Big 5 Sporting Goods continues to grow and prosper by maintaining their core strategy of providing convenient shopping and low prices.
Although this is a highly competitive industry, the fact that Big 5 has been in business and successful for so many years tends to convince me that this company will be around for years. In addition, the company is in only 11 states so there's plenty of room for continual expansion.
I have to admit that the fundamentals haven't always been the best and that has been reflected in the stock chart. But estimates going forward look a lot better so it comes down to whether its more prudent to project forward base on past performance or rely on the analysts expectations. Personally I wouldn't 100% of my trust in either one. But if the earnings estimation of 15% going forward is accurate and next year projected earnings is $1.27, then it's quite easy to see this stock rising to $19 per share next year. That would be an almost 38% gain in the next 12-18 months.
Looking at the price chart it's also easy to see that Big 5 could be on the verge of making another run at its previous highs near $19 per share. That would be a triple high. Resistance would be expected to arrive as the stock approached that level so that might be a great area to take profits or sell options. Either way, there's a pretty good strategy based on the stock chart.
With support just below $14 per share (about where it is now) and resistance near $19, there's little downside risk and the potential $5 gain. That's a area that could provide a nice return.