UPDATE 2-Big 5 Sporting Q3 tops market, sees strong Q4 profit

* Q3 EPS $0.37 vs est $0.33 * Q3 sales $231.6 mln vs est $231.4 mln * Sees Q4 EPS $0.28-$0.38 vs est $0.26

* Shares up 6 percent in after-hours trade (Recasts; adds analyst comments, conference call details, share movement)

By Viraj Nair

BANGALORE, Nov 3 (Reuters) - Big 5 Sporting Goods Corp (BGFV.O) reported better-than-expected quarterly results, helped by higher product margins and cost reductions, and forecast a fourth-quarter profit above market estimates, sending its shares up 6 percent in after-market trade.

The sporting goods retailer projected a fourth-quarter profit of 28 cents a share to 38 cents a share.

Analysts on average were expecting a profit of 26 cents a share, according to Thomson Reuters I/B/E/S.

Big 5 Sporting, which operates 382 stores in 11 states in the United States, expects sales at stores open at least a year to rise in the low to low-mid single-digit range in the fourth quarter.

Chief Executive Steven Miller said on a conference call with analysts that product selling margins continue to be healthy in the fourth quarter.

"A part of that (the improved product margins) is driven by opportunistic inventory buys, which (Big 5) indicate are still out there as we approach the key holiday selling season," Stephens Inc analyst Rick Nelson said by phone.

Nelson added that same-store sales for the quarter to-date look encouraging.

Big 5 Sporting, which did not open any stores in the third quarter, expects to open two stores in the fourth quarter and sees the number of new store openings in fiscal 2010 to be substantially higher than 2009.

Big 5 Sporting's profit has topped market expectations for the past four quarters, as the sporting goods retailer rigorously controlled personnel and advertising expenses to combat the soft sales climate.

Selling and administrative expense as a percentage of net sales improved to 28.2 percent in the third quarter, compared with 29.6 percent in the prior year.

Gross profit margin was 33.9 percent versus 33.3 percent last year. The improvement in gross profit margin was driven primarily by an increase in merchandise margins of 13 basis points and lower distribution costs.

For the third quarter, net income rose to $8 million, or 37 cents a share, from $4.5 million, or 21 cents a share, a year-ago.

Net sales rose 4 percent to $231.6 million.

Analysts on average expected a profit of 33 cents per share, before items, on revenue of $231.4 million.

Shares of the El Segundo, California-based company were up 6 percent at $16.43 in post-market trade. They closed at $15.50 Tuesday on Nasdaq. (Reporting by Viraj Nair in Bangalore; Editing by Unnikrishnan Nair, Anne Pallivathuckal)