- Dick's Sporting Goods reports first-quarter earnings, sales that top analysts' estimates.
- The retailer also raises its full-year profit outlook.
Shares of Dick's Sporting Goods jumped Wednesday after the company reported quarterly earnings that topped analysts' estimates and raised its full-year outlook.
The sporting goods retailer's stock was up as much as 6.2% in premarket trading on the news, having climbed about 18% over the past 12 months. Shortly before the opening bell, they were up 2.1%.
In its fiscal first quarter, Dick's reported net income of $57.5 million, or 61 cents per share, compared with $60.1 million, or 59 cents a share, a year earlier.
Excluding asset impairment costs and a legal settlement, the retailer earned 62 cents a share, topping estimates for 58 cents a share expected by analysts surveyed by Refinitiv.
Sales inched up 0.6% to $1.92 billion, which was higher than the $1.9 billion analysts were calling for.
For the year, Dick's says it now expects to earn of $3.20 to $3.40 a share on an adjusted basis, up from a previous range of $3.15 to $3.35.
CEO Ed Stack said same-store sales at Dick's "turned positive in March and remained positive in April, as we started to see the benefits of our key strategies and investments." Overall, for the quarter, same-store sales were flat, compared with a drop of 2.5% a year earlier. Analysts were calling for a drop of 1.3% this quarter.
Online sales were up 15% during the first quarter, the company said.
Bank of America predicted earlier this week that Dick's would get back to same-store sales growth in the second quarter. BofA retail analysts cited fewer headwinds in the hunting category, shipments from Nike and Adidas of popular footwear styles like the Nike Air Max 720 and the Adidas Ultraboost 19, and "continued strength in outdoor equipment as Dick's continues to elevate its product assortment with key brands such as YETI" for the more upbeat outlook.
Dick's hunting sales suffered when the company was one of the first retailers to stop selling assault rifles and high-capacity magazines after the February 2018 high school massacre in Parkland, Florida. It also banned the sale of guns to people under age 21.
But Stack hasn't backed down on his decision and is actually leaning even more into it. During the third quarter last year, as a trial, Dick's removed nearly all hunting products from 10 stores, replacing them with baseball gear and other licensed sports merchandise. In March, Dick's said it would expand this initiative, eliminating guns and other hunting products from 125 locations this year.
"Overall, this is a reasonable set of results. It indicates that Dick's business is stabilizing, but that there is a lot more work to do in order to engineer growth," GlobalData retail managing director Neil Saunders said.
"One area that could help drive up margins is the development of more own-brand products," he said. "Dick's has a trusted name ... and while the strategy may not work in certain categories, in others like outdoor it would be more successful."