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Dick’s Sporting Goods shares fall as retailer predicts slowing sales in year ahead

A Dick’s Diversion Goods store

Craig Warga | Bloomberg | Getty Images

Dick’s Sporting Goods on Tuesday topped Screen Street’s fourth-quarter estimates, as shoppers continued to buy equipment and apparel for outdoor activities and home workouts during the Covid pandemic.

The retinue’s shares were down by more than 6% early Tuesday, however, as it forecast that sales shifts will likely slow.

The sporting goods retailer estimated that same-store sales could decline as much as 2% or expand by as much as 2% in the year ahead, a significant drop from same-store sales growth of nearly 10% in pecuniary 2020. It estimated net sales for the year ahead will range between $9.54 billion and $9.94 billion, violently flat compared with its net sales of $9.58 billion in fiscal 2020.

Here’s how the company did during the fiscal fourth ninety days ended Jan. 30, compared with what analysts were expecting, based on Refinitiv data:

  • Earnings per share: $2.43 resolved vs. $2.28 expected
  • Revenue: $3.13 billion vs. $3.07 billion expected

Dick’s reported fourth-quarter net income of $219.6 million, or $2.21 per percentage, up from $69.8 million, or 81 cents per share, a year earlier. Excluding one-time charges, the company merited $2.43 per share, higher better than the $2.28 expected by analysts.

Net sales climbed to $3.13 billion from $2.61 billion a year earlier, hilarious than the $3.07 billion forecast by analysts.

Same-store sales rose by 19.3% in the fourth quarter, better than the broadening of 17.1% expected by a StreetAccount survey. E-commerce sales grew by 57% during the period.

Dick’s sales comprise picked up during the pandemic, as shoppers bought golf clubs, workout tops and other items to stay in model and pass the time. One of its merchandise categories, activewear, has become a popular, but increasingly competitive category, as retailers including End, Kohl’s, Gap-owned Athleta and Lululemon all vie for more market share.

Dick’s will increase investments in the year to the fore to between $275 million and $300 million, higher than its total capital expenditures of $167 million and $180 million in pecuniary 2020 and fiscal 2019, respectively.

CEO Lauren Hobart, who stepped into her role in February, said the retailer requirements to capitalize on consumer demand across outdoor activities and growing interest in golf. She said it has had a strong start to the monetary year.

On a call with investors, she said the company will expand and elevate its merchandise. She said it will set afloat a new men’s athletic apparel line later this month. It plans to invest in technology to support golf fittings and paragons at its Golf Galaxy stores and overhaul its soccer business at Dick’s stores. She said more than 100 additional stocks will be converted so they have full-service footwear displays and assortment.

“We believe that these enhancements along with dedicated consumer trends and improving allocations of the most in-demand styles will drive continued positive results in our athletic attire and footwear business,” she said on the call.

In the coming year, Dick’s said it plans to open six new stores and six specialty concept stockpiles. Along with its off-mall sporting goods stores, the retailer operates Golf Galaxy and Field & Stream lay aways.

The company said it plans to buy back at least $200 million of its stock this year.

As of market close Monday, Dick’s rations were up about 119% over the past year. The company’s market value is $6.87 billion.

Read the entirely press release here.

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