Dick’s Sporting Goods, Inc. (NYSE: DKS)
Dick’s Sporting Goods on Wednesday reported a second-quarter net income of $119.4 million, up 6.2% from the prior-year period.
However, a drop of 4% in same-store sales during the quarter saw its shares fall as much as 11% before the opening bell.
The retailer blamed the decline on the strategic decisions that Under Amour made to expand distribution.
The active-wear maker and Dick’s Sporting Goods rely heavily on each other. In fact, Under Amour is Dick’s second best-selling brand after Nike.
DKS Earnings & Outlook
Net income during the quarter was $119.4 million, or $1.20 per share, an improvement from $112.4 million, or $1.03 per share, in the same period a year-ago.
Revenue jumped 1% to $2.177billion, from $2.157 billion a year earlier. Same-store sales dropped 4%, compared with analyst expectations of 0.6%
Thompson Reuters, based on analyst estimates, was for diluted earnings of $1.06 per share and $2.237 billion revenue.
The retailer has also boosted its adjusted earnings outlook for the full year to between $3.02 and $3.20 per share, from the earlier forecast of $2.92 to $3.12 per share. Analysts expect the company to report full-year adjusted earnings of $3.08 per share.
Dick’s Sporting Goods CEO Comments
Chairman and Chief Executive Officer Edward W. Stack said, “As we continue to focus on driving profitable sales, we are very pleased with our strong gross margin improvement. An improved product cycle, fewer promotions, and a favorable product mix contributed to the overall strength in our merchandise margin.”
Stack continued, “We delivered double digit growth in eCommerce, private brands, and athletic apparel excluding Under Armour, however, as expected, sales were impacted by the strategic decisions we made regarding the slow growth, low margin hunt and electronics businesses, which accounted for nearly half of our comp decline. In addition, we experienced continued significant declines in Under Armour sales as a result of their decision to expand distribution. We are very confident our sales trajectory will improve next year as these headwinds are expected to subside.”
Dick’s Sporting Goods, Inc. Company Profile
Dick’s Sporting Goods, Inc. operates as a sporting goods retailer primarily in the eastern United States. It provides hardlines, including sporting goods equipment, fitness equipment, golf equipment, and hunting and fishing gear products; apparel; and footwear and accessories.
The company also owns and operates Golf Galaxy, Field & Stream, and other specialty concept stores; and e-commerce Websites, as well as Dick’s Team Sports HQ, a youth sports digital platform that offers free league management services, mobile apps for scheduling, communications and live scorekeeping, custom uniforms and fan wear, and access to donations and sponsorships.
As of August 4, 2018, it operated approximately 728 stores in 47 states. The company was formerly known as Dick’s Clothing and Sporting Goods, Inc. and changed its name to Dick’s Sporting Goods, Inc. in April 1999. Dick’s Sporting Goods, Inc. was founded in 1948 and is headquartered in Coraopolis, Pennsylvania. –YahooFinance