Big 5 Sporting Goods announces 50% dividend cut to $0.125 quarterly

US retailer Big 5 Sporting Goods (symbol: BGFV) has announced a 50% dividend cut from $0.25 to $0.125 quarterly per share. This is the third dividend cut since 2018 by the specialty retailer. Even with the big cut included the dividend yield remains high with 7% at a stock price of $7.06.

Big 5 Sporting Goods, a well-known retail company, recently made an important financial decision by reducing its quarterly cash dividend. The company's Board of Directors declared a dividend of $0.125 per share of outstanding common stock, which will be disbursed on December 15, 2023, to stockholders of record as of December 1, 2023. This dividend rate represents a significant reduction from the previous quarterly cash dividend of $0.25 per share. With the dividend cut Big 5 joins many other US retail stocks cutting the dividend in 2023.

Steven G. Miller, the Company’s Chairman, President and Chief Executive Officer, said "Given the uncertainty of the duration of the challenged macroeconomic environment, and given our commitment to maintaining a healthy balance sheet, we have proactively adjusted our dividend to maintain ample financial flexibility"

The decision to cut the dividend in half is driven by the company's strategic approach to capital management. Big 5 Sporting Goods aims to maintain a robust financial position, especially in light of the current uncertainties surrounding the macroeconomic challenges. While the exact duration of these challenges remains uncertain, the company is taking a prudent approach to ensure it maintains a healthy financial condition.

By reducing the dividend rate, Big 5 Sporting Goods intends to allocate its financial resources more effectively and responsibly. This action is in line with their commitment to safeguard the company's financial health and stability during the ongoing economic uncertainties. Big 5 also announced a 66.7% dividend cut in 2018 and suspended the dividend in 2020 because of the covid-19 pandemic.

The new dividend rate of $0.125 per share reflects the company's emphasis on prudent financial management, which is essential for navigating unpredictable economic conditions. It is a proactive step taken by the company's leadership to prioritize the long-term financial well-being of Big 5 Sporting Goods and its stakeholders.

Another retail company announcing a dividend cut Yesterday is VF Corporation, the former Dividend Aristocrat owner of the North Face, Timberland and Vans brand names.

Big 5 Sporting Goods Corporation is a western U.S.-based sporting goods retailer with approximately 432 stores and an e-commerce platform. They offer a wide range of athletic products, including footwear, apparel, outdoor equipment, and accessories, from various brand-name manufacturers. Their gift card operations are managed through a subsidiary called Big 5 Services Corp.