The mild weather that swept through much of the western United States in the last couple of months may have been welcomed by many, but not by executives or stockholders of Big 5 Sporting Goods Corp.

The unseasonable warmth prompted consumers to put off purchases of ski and other winter weather apparel, as well as seasonal sporting goods, which led to a 2 percent sales skid at Big 5 stores during the fourth quarter.

Big 5 of El Segundo made the figures public Jan. 11, reporting sales of $227 million, below analysts’ estimates of about $235 million. The next day, analyst Mark Smith of Minneapolis-based Feltl and Co. downgraded the stock to “hold” from “buy,” citing reduced sales. Smith also cut his price target for 2012 to $9 from $11.

The double whammy of lower same-store earnings and the downgrade sent Big 5 shares plunging 23 percent, closing Jan. 18 at $7.95 a share, making it the biggest loser on the LABJ Stock Index (see page 36). Shares were off 44 percent from one year earlier.

For Big 5, the news was especially disheartening, since the sporting goods and apparel chain with 406 stores in 12 western states was coming off a sluggish fourth quarter in 2010. The company was hoping for a turnaround this holiday season and the fourth quarter had actually started well as consumers generally seemed to be in a spending mood.

“We are disappointed with our fourth quarter sales results, particularly given that same store sales were solidly positive through the first half of the quarter,” said Chief Executive Steven Miller, in a press release.

Miller said the warm winter weather trimmed sales of nearly all of the company’s product lines, especially apparel, which was down about 5 percent compared with fourth quarter 2010.

He added that the extensive use of sales promotions, especially in the days just before Christmas, also cut into sales revenue. The warm weather – and the sluggish sales – continued during the crucial week after Christmas.

About the only good news, Miller said, was that inventories didn’t pile up as much as might have been expected with a drop in sales. Part of that was due to the heavy discounting.

But that discounting came at a price, Smith said in his research note.

“We think the company was promotional to help manage inventory, which hurt margin,” he said.

The return of winter weather in the West last week may halt the sales skid, but the damage will likely last into the first quarter. “We think the consumer environment remains difficult and, with this large of an impact from weather, think the risk outweighs the potential reward,” the note said.

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