Earnings Previews For The Week of April 28-May 2

West Marine (NASDAQ: WMAR): West Marine will report full 1Q08 results on Wednesday morning, followed by a conference call at 11:30 am EST (Dial-in number: 888-756-1546). The company previously reported 1Q08 revenue of $113.3M, a 10% decrease y/y, on a same-store sales decline of 9.4%. Given the weak sales figures, we do not expect much in the way in earnings and neither does the Street (the consensus estimate is -$0.58, according to Yahoo!). Expect this stock to trade down this week, not because of the quarterly results, but because of the impact that rising gas prices (ask any boat owner if they plan to use their boat less or more this season) will likely have on upcoming boating season. However, at $5 per share, the stock may not provide enough incentive for short sellers.

Big 5 Sporting Goods (NASDAQ: BGFV): Big 5 will report 1Q08 results following the markets close on Wednesday, with the conference call at 5:00 pm EST (Dial-in: 800-762-8908). Estimates for this stock have come down in recent weeks, and probably rightfully so. The best-of-breed in the sporting goods sector, Dick's Sporting Goods (NYSE: DKS), already warned about potentially weak 1Q08 results, and Big 5 will likely be no different (consensus revenue and EPS estimates are $214.4M and $0.19, respectively) . Compounded by a particularly challenging economic situation in its home state California, we would not be surprised to see the stock retreat into the $7-$8 range later this week.

Town Sports International (NASDAQ: CLUB): Town Sports will report 1Q08 results Thursday afternoon, and the conference call will be held at 5:00 pm EST (Dial-in: 800-659-1942; Pwd: 95822148). The Street is calling for $124.9M in revenue and $0.15 in earnings. In general, we believe the fitness club space is more resilient to slowdowns in the economy because of the subscription nature of memberships (one- and two-year contracts make it more difficult for members to cancel). However, the economic situation in several of Town Sport's key markets has deteriorated, and could make mature-club membership acquisition more difficult. We like this stock as a long-term holding because of the economies of scale, but more attractive entry points will likely present themselves. We will look deeper at the investment thesis for Town Sports later this week, as we believe it makes for an interesting case study regarding investor psychology.

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