Dick's: Sales, earnings figures revised downward
Dick's Sporting Goods Inc. cautioned Wall Street on Tuesday that same-store sales, as well as operating earnings, would come in lower than expected this year.
The Findlay-based retailer said weaker consumer spending changed its 2013 outlook for same-store sales growth to flat to up 1 percent from the previous projection of 2 percent to 3 percent growth. Same-store sales are a good measure of a retailer's performance because it differentiates between revenue growth from improved management and gains from new outlets.
“Dick's is not an isolated case. We're seeing a slower consumer environment than most people anticipated,” said Sean Naughton, an analyst at Piper Jaffray, Minneapolis.
Dick's joined a number of retailers, including big-box names, that reported sluggish quarterly results. Weak consumer spending hurt companies such as Wal-Mart Stores, J.C. Penney and Macy's.
Dick's stock closed Tuesday at $46.64 a share, down $3.95.
“We continue to see more people spending on home improvement and automobiles and appliances,” said the analyst. “But that is sucking up some of consumers' discretionary dollars.”
Naughton said many consumers tempered spending on sports gear and other discretionary items because of the 2 percent restoration of the payroll tax for Social Security. A recent Piper Jaffray survey found 42 percent of consumers said higher taxes led them to lower spending.
Dick's operates about 600 stores in 44 states, including 81 Golf Galaxy locations and two TrueRunner stores.
The retailer revised downward its operating earnings outlook to between $2.60 and $2.65 a share, from $2.84 to $2.86.
To combat sluggish consumer spending, the retailer will spend more on advertising and invest in growth categories such as hunting gear and high-schoolers' athletic apparel, CEO Edward Stack told analysts on a conference call.
Stack said the prototype Field & Stream store that opened in Cranberry on Friday produced the best grand-opening day in company history. A second Field & Stream store, which sells hunting/fishing/camping gear, will open in Kentucky in November, and a third in Erie next year.
“Once we get to 15 or 20 stores, we'll be happy,” Stack said without pinpointing exactly how many Field & Stream stores Dick's plans to open.
The revised financial outlook came amid Dick's financial report for the fiscal second quarter ended Aug. 3, showing earnings jumped 57 percent to $84 million, or 67 cents a share, compared with $53.7 million, or 43 cents a share, a year earlier. Year-ago results included a $32.4 million charge for impaired securities.
On an operating basis, earnings equaled 71 cents a share. Most analysts expected the retailer to earn 74 cents a share.
Sales rose 6.6 percent to $1.53 billion from $1.44 billion.
Stack said higher-than-normal rain and cooler temperatures in much of the country in July dampened results, particularly for golf-related sales, which account for nearly 20 percent of Dick's revenue.
Thomas Olson is a Trib Total Media staff writer. Reach him at 412-320-7854 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Regulators release details of Highmark’s post-UPMC transition plan
- Google’s corporate products division changes name
- Netflix offers new way to share recommendations
- Norwegian sails into luxury with Prestige purchase
- McDonald’s to watch Chinese suppliers
- Smaller companies outperform multinationals on U.S. strength over eurozone
- Fittingly, a party ushers out Revel
- More pipelines proposed to carry Marcellus gas to southeast markets
- Manufacturing cranks up production pace
- Foreign firms feel more unwelcome under China regulations
- Roundup: Area drivers pay less for gasoline; Study to look at financial impact of gas boom; more