Dive Brief:
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Dick’s Sporting Goods Inc. on Thursday reported profit of $56.9 million, or 50 cents per share, down 10% from $63.3 million, or 53 cent per share, a year ago. That beat its own March forecast of 48 cents to 50 cents per share in the quarter, but missed analyst estimates for 54 cents per share, according to Thomson Reuters.
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The sporting goods retailer said that Q1 same-store sales rose up 0.5%; same-store sales at Dick’s stores increased 0.4%, while they increased 1.7% at Golf Galaxy stores.
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Dick's also forecast a bleak second quarter, saying earnings would range between 62 cents and 72 cents per share, missing analyst exceptions of 78 cents per share, and that same-store sales would fall 1% to 4%.
Dive Insight:
While Dick’s, unlike now-bankrupt rival Sports Authority, has been on-trend with plenty of offerings in the athleisure space, it’s still struggling to attract today’s fickle consumer.
In a statement, Dick's CEO Edward Stack said that the company expects to take a hit as Sports Authority stores liquidate and flood the market with under-priced merchandise, but said “over the longer term, we remain confident in our ability to aggressively capture displaced market share and to strengthen our leadership position.”
Dick's could also benefit from the Sports Authority bankruptcy, though, and the Wall Street Journal reports that the retailer will bid on some 30 Sports Authority locations. There are concerns, however, that Dick’s already may have too many stores, according to a note from Morgan Stanley, which earlier this month downgraded Dick’s and said that new stores for the retailer won’t spell growth.
In March, Dick's said that it will continue to invest in its existing stores as well as its e-commerce and omnichannel efforts.
“These investments are expected to have an approximate $50 million to $55 million impact on earnings in 2016 and include enhancing the shopping experience in our stores, building brand equity in a significant way through our partnership with the United States Olympic Committee and Team U.S.A., and transitioning our e-commerce business to our own platform," Stack said at that time.
