Share This Page

Dick's Sporting Goods 3Q earnings flat

| Tuesday, Nov. 19, 2013, 11:00 a.m.

Dick's Sporting Goods Inc.'s push into e-commerce and its emphasis on higher-margin athletic apparel and footwear may be paying off.

The Findlay-based retailer on Tuesday posted higher than expected sales last quarter, despite a climate of continued consumer caution.

The company recorded sales of $1.4 billion in the three months ended Nov. 2, a 6.7 percent increase over $906 million the year earlier. Same-store sales rose 3.3 percent, compared with the flat to 1 percent rise the company had expected.

“Overall, their business is good and store traffic is getting strong,” said Sam Poser, an analyst for Sterne Agee & Leach Inc., New York.

Weakness in outdoor apparel and equipment was more than offset by stronger sales in athletic apparel and footwear. The latter generates higher profit margins and continues to be a focus of Dick's in-store remodeling activity.

The company remodeled the apparel sales space in 75 Dick's stores this year to increase customer traffic and completely remodeled four other stores. The company operates 558 Dick's Sporting Goods stores in 46 states.

Dick's expects to draw more customers with more direct marketing and continued free shipping, which the retailer promoted last quarter. Free shipping has “become more of the norm” in retailing, especially in e-commerce, which now accounts for about 6.5 percent of Dick's sales, said CEO Edward Stack during a conference call with analysts.

While the retailer lost some revenue by doing more free shipping last quarter, Stack said, it was offset by higher sales volumes, which usually accompany free shipping.

Stack said marketing efforts, as well as selective pricing initiatives, drove up store traffic but dampened profit margins somewhat more than expected. In “isolated” markets last quarter, Dick's priced certain products lower to compete, but Stack expects such cases to remain the exception.

The retailer said same-store sales should increase 3 percent to 4 percent in the November-February, fiscal fourth quarter.

In addition, Dick's raised its earnings guidance somewhat for the full year, saying per-share profit would be $2.62 to $2.65, an increase from the previous projection of $2.60 to $2.65.

Shares of Dick's Sporting Goods Inc. set a 52-week high on the financial news. The stock reached $58.40 midday Tuesday before settling back to close at $56.14, down 23 cents.

Company earnings guidance assumes a continuation of a “cautious consumer environment,” Stack said.

The company earned $50 million last quarter, roughly unchanged from the year earlier. The current period contained one week less than the year-ago quarter.

Per-share earnings of 40 cents were the same as a year earlier but above the 37 cents to 39 cents the company had expected, and just above the 39 cents expected by most analysts.

Dick's said that in recent weeks, it completed its 2013 store development program. This year, it opened 40 Dick's Sporting Goods stores, one Golf Galaxy store, one True Runner store and two Field & Stream stores, including the first one in Cranberry on Aug. 16.

Thomas Olson is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or tolson@tribweb.com.

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.