Big 5 Sporting Goods Q1 2025: Unpacking Contradictions in Sales, Inventory, and Margins

Sales and economic conditions, inventory management and strategic initiatives, merchandise inventory trends, store optimization strategy, and gross margin trends are the key contradictions discussed in Big 5 Sporting Goods' latest 2025Q1 earnings call.



Sales and Revenue Performance:
- Big 5 Sporting Goods reported net sales of $175.6 million for Q1 2025, down from $193.4 million in the prior year.
- The decline was primarily due to same-store sales down 7.8%, with winter-related sales down nearly 25%, and transaction counts down 5.3%.
- March sales improved to be flat with the previous year, but the negative impacts of unfavorable weather and macroeconomic conditions persisted.

Inventory Management and Tariff Impact:
- The company ended the quarter with inventory up 6.5% year-over-year, due to earlier receipts of seasonal merchandise compared to last year.
- The timing difference allowed them to mitigate the impact of increased tariff costs and position inventory for the summer season.
- They anticipate normalizing inventory levels by the end of the year, despite the challenges posed by tariffs.

Strategic Store Optimization:
- Big 5 Sporting Goods closed 8 stores in Q1 2025 and plans to close approximately 7 additional stores over the remainder of the year.
- This strategic move aims to focus resources on more productive stores, optimizing the store portfolio to improve overall performance.

Financial Outlook and Market Conditions:
- The company expects same-store sales to be down in the low to mid-single-digit range for the fiscal 2025 second quarter.
- The ongoing macroeconomic challenges and calendar shifts, such as the Easter holiday, are expected to continue impacting sales.