Dick’s Sporting Goods posts strong earnings and raises its full-year guidance (DKS)

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Dick’s Sporting Goods beat on first-quarter earnings and again raised it’s full-year guidance.
The sporting-goods retailer will continue to invest in its online experience.
Shares jumped as much as 7% ahead of Wednesday’s opening bell, but were flat in early action.
Watch Dick’s Sporting Goods trade live.

Dick’s Sporting Goods reported first-quarter earnings that were well ahead of expectations and again raised its full-year guidance for 2019, sending shares up as much as 7% before opening little changed.

The company reported earnings per diluted share of $0.61, beating the $0.58 that analysts surveyed by Bloomberg were expecting. Earnings from the same period last year were $0.59 a share.

Meanwhile, net sales edged up 0.6% to $1.92 billion, as same store sales turned positive in March and continued to climb in April. Comparable sales remained flat, inline with expectations.

Dick’s also bolstered its outlook for the year, expecting a 2% increase in same-store-sales growth and full-year earnings of $3.20 to $3.40 per share, up from prior expectations of $3.15 to $3.35.

Online sales for the quarter increased 15% over last year, and made up 13% of total net sales versus 11% a year ago. Total inventory also increased 16.2% from the first quarter of 2019.

"As we continue to build the best omni-channel experience in sporting goods, we see significant opportunity to drive competitive advantage in the marketplace and strengthen our leadership position," said Lauren Hobart, Dick’s president, in the press release.

The strong start to the year comes after a weak end to 2018, when a narrow beat on estimates and a disappointing 2019 outlook sent shares plummeting.

"We were pleased with our start to 2019, delivering higher merchandise margins and first quarter earnings per diluted share above last year," said Edward Stack, CEO of Dick’s, ""We are very enthusiastic about our business and are pleased to increase our full year earnings outlook."

The sporting-goods industry has struggled to maintain earnings as competition from online retailers like Amazon ramps up. Under Armour shares sank in March after Dick’s said that it would release a new private athletic label that would compete with the brand for floor space. Dick’s CEO Edward Stack also previously named Under Armour’s performance as a reason for the retailer’s diminishing same-store sales.

Rival Modell’s Sporting Goods recently hired Berkeley Research Group, a restructuring advisor to help the company regain its footing after suffering from declining sales. Next steps for the retailer could include filing for bankruptcy.

This quarter, Dick’s shuttered two stores, relocated one store, and opened one new Golf Galaxy store. For the rest of the year, the company said it will continue to invest in omni-channel development, as well as repurchasing company stock.

Dick’s is up 13.25% this year.

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