Steven Miller, president and CEO, said during the call that mostof the blame for the drop in same store sales and a drop in netincome to $5.9 million during Q2 was lackluster consumer spending."We're not exactly sure of the macroeconomic issues affecting thespending, whether it be gas prices, housing or other reasons, butthere has been an effect on spending habits," Miller said. "It's adifficult retail environment." Big 5 did increase net sales by 2.9%to $217.8 million from net sales of $211.8 million for the secondquarter of 2006.

He also said that the summer of 2006 hit early, boostingspending, prompting an unfavorable comparison to the cooling trendthis year. "Last July, many of the West Coast areas, especiallyCalifornia, had a long-lasting heat wave that benefited summersales," Miller said. "We're cautiously optimistic that during theback half of the third quarter, the weather should not be as largea factor." The company's 348 stores operate in 10 states in theWest Coast region.

The company is on track for its store openings, Miller said.Stores opened in Denver, Fort Collins, CO and Selma, CA during thesecond quarter. The company will open five new Big 5 stores in thethird quarter, and is on track to have 20 new stores open byDecember, Miller said.