APRIL 29, 2004 -- For the Q1 2004, Big 5's net sales increased by $16.5 million, or 10.0%, to $181.0 million. Same-store sales increased 5.2%, representing the company's thirty-third consecutive quarterly increase in same-store sales over comparable prior periods. Net income increased to $6.8 million, or $0.30 per diluted share, compared to net income of $3.4 million, or $0.15 per diluted share, in the same period last year. Net income for Q1 2003 included a charge of $875,000, net of taxes, associated with the redemption of $20.0 million principal amount of the company's 10.875% senior notes. Excluding this charge, net income was $4.3 million, or $0.19 per diluted share.
"We are pleased to report outstanding first quarter earnings results which meaningfully exceeded both our guidance and analysts' estimates," said Steven Miller, CEO. "Our performance was driven by a 5.2% same-store sales increase versus the first quarter of 2003, which represented our thirty-third consecutive quarterly increase in same-store sales. Once again, our same-store performance was positive in each of our five geographic regions and for each of our three major merchandise categories, footwear, apparel and hard goods. The company also benefited from improved operating profit margins and significantly reduced interest costs during the quarter versus the first quarter of 2003. We believe we are well positioned to continue this strong performance into the second quarter and throughout the remainder of 2004."
The company ended Q1 operating 294 stores, opening three new stores since year-end, two of which were relocations. The company anticipates opening between 15 and 20 net new stores in fiscal 2004.
Big 5 expects to realize same-store sales growth in the low to mid-single-digit range for Q2, resulting in EPS in the range of $0.34 to $0.36. For the FY, the company expects same store sales growth in the low to mid-single-digit range, resulting in EPS of $1.55 to $1.61 which compares to previous guidance of $1.47 to $1.53 per diluted share. Both the second quarter and full year estimate of EPS exclude $0.02 per diluted share, which will be recorded in the second quarter, related to a charge associated with a redemption of $15.0 million principal amount of the company's 10.875% senior notes.
FY 2004 will include 53 weeks for accounting purposes, with the extra week being included in the company's Q4 results. This additional week should add approximately 1.75% to FY 2004 sales versus fiscal 2003, but should not have a material impact on earnings results for the fourth quarter or year.