Big 5 Sporting Goods Corp.'s shares soared Friday after the sporting goods retailer reported third-quarter results that surpassed market expectations.
THE SPARK: The company said Thursday that its net income increased 41 percent to $8.2 million, or 38 cents per share. That compares with $5.8 million, or 27 cents per share, in the third quarter last year. The most recent quarter includes a 1 cent-per-share expense for store closings. Revenue increased 7 percent to $251.8 million.
Analysts polled by FactSet expected 33 cents per share on revenue of $248.5 million.
Big 5 also forecast earnings of 13 to 21 cents per share for the fourth quarter. Analysts expected 18 cents per share.
THE BIG PICTURE: Big 5 said it benefitted in a shift of the Fourth of July holiday into its third quarter from the second quarter last year. The company improved profit margins during the period.
Big 5 said it believes the gains are a result of merchandise and marketing efforts it has put in place.
THE ANALYSIS: Stifel Nicolaus analyst David Schick said that the results indicate that Big 5 may be into a legitimate turnaround. Schick said the initiatives are in the early stages, but he believes there are more improvements to come.
SHARE ACTION: Shares jumped $3.23, or 36.2 percent, to $12.15 in afternoon trading Friday. The stock hasn't closed at that level since spring of 2011.