A Dick’s sporting goods store stands in Staten Island on March 09, 2022 in New York City.
Spencer Platt | Getty Images
Shrinking who?
Sales and profit at Dick’s Sporting Goods rebounded in the fiscal third quarter, prompting the retailer to raise its full-year guidance on Tuesday after shocking investors earlier this year when it cut its outlook on theft concerns.
Dick’s beat Wall Street estimates on the top and bottom lines for the period. In a news release, the company said it was “excited” for the holiday season after seeing “strong” back-to-school sales.
Dick’s shares opened up more than 9% on the news.
Here’s how the sporting goods retailer performed in the fiscal third quarter compared to what Wall Street expected, based on a survey of analysts from LSEG, formerly Refinitiv:
- Earnings per share: $2.85 adjusted, versus $2.44 expected
- Income: $3.04 billion vs. $2.94 billion expected
The company’s reported net income for the three-month period ended Oct. 28 was $201 million, or $2.39 per share, compared with $228 million, or $2.45 per share, a year earlier. Excluding one-time items, Dick’s saw earnings per share of $2.85.
Sales rose to $3.04 billion, up about 2.8 percent from $2.96 billion a year earlier.
For the full year, the company now forecasts earnings per share to be between $11.45 and $12.05, compared with the range of $11.27 to $12.39 that analysts were expecting, according to LSEG. Dick’s raised its guidance from a previous range of $11.33 to $12.13. But it still falls short of the initial outlook the company set earlier this year, when it said it expected earnings of $12.90 to $13.80.
Dick’s also slightly raised its comparable sales outlook and expects them to rise between 0.5% and 2%, compared with a previous range of flat to 2%. Much of that range would have exceeded the 0.7% increase that analysts had expected, according to StreetAccount.
Dick’s did not immediately share additional details about its holiday forecast. But because it only slightly raised its same-store sales outlook despite a strong third-quarter hit, Dick’s is looking a little cautious heading into the holiday season, echoing the sentiment of other retailers who are concerned that demand will be tepid.
When Dick’s reported its fiscal second-quarter earnings this summer, its shares plunged 24% after it blamed theft and aggressive cutbacks for a staggering 23% drop in profits. A rise in “organized retail crime and theft in general” — plus aggressive markdowns to clear excess inventory — contributed to the profit loss. The company said this would affect its guidance for the year.
Although Dick’s’ earnings guidance is still below the range it originally set, strong sales during the school months prompted the company to raise its outlook and set a positive tone for the crucial holiday shopping season.
“We are pleased with our results for the third quarter. With our best-in-class athletic experience and differentiated assortment, we had a very strong back-to-school season and continued to gain market share as consumers prioritize DICK’s sporting goods to meet their needs,” said the president and CEO Lauren Hobart in a news release. “As a result of our strong performance in the third quarter, we are raising our outlook for the full year, which balances the confidence we have in our key strategies with the recognition of an uncertain macroeconomic environment.” We are excited about the upcoming holiday season and the product, service and experience we provide our athletes.”
Read the full earnings announcement here.
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