Dive Brief:
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Dick’s Sporting Goods Tuesday reported Q4 net sales rose 3.7% to approximately $2.2 billion. Q4 same-store sales fell 2.5%, compared to a 3.4% increase in Q4 2014. The results missed guidance of a 2.0% decrease to 1% increase.
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Q4 same-store sales for Dick's flagship stores fell 2.5%, while at its Golf Galaxy stores, those sales fell 5.8%. Fourth quarter 2014 consolidated same store sales increased 3.4%.
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Its Q4 earnings per share of $1.13 on $2.24 billion in revenue (down from its $1.30 on $2.16 billion year over year) missed expectations for earnings of about $1.15 per share on $2.28 billion in revenue, according to Thomson Reuters.
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Much of the retailer’s challenges were reflected in its inventory problem: Total inventory increased 9.8% year over year at the end of Q4, due to unseasonably warm winter weather as well as its plans to bring spring inventory in earlier to stores, the company said.
Dive Insight:
Dick’s outlook these days is a bit brighter thanks to the troubles at rival Sports Authority, which filed for bankruptcy protection last week. According to the Wall Street Journal, Deutsche Bank analysts say that Dick’s could absorb 20% of sales that would have gone to Sports Authority stores that close. Deutsche Bank said that Sports Authority's plans to close 140 stores could boost Dick’s annual sales by more than 2%, and if Sports Authority liquidates entirely, Dick’s sales could be boosted as much as 7%.
Last week, Bloomberg reported that Sports Authority is in talks to sell stores and assets to rivals including Dick’s. The report noted it’s still early days for the private talks, so no details on how many stores might be involved are available. Neither Sports Authority nor Dick’s has commented on the report.
In the meantime, Dick's said Tuesday that it will continue to invest in its stores as well as its e-commerce and omni-channel efforts.
"In 2016, we will continue to make strategic investments in our business to grow our leadership position in the industry and build meaningful momentum for 2017 and beyond,” chairman-CEO Edward W. Stack said in a statement. “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."
