Dick’s Sporting Goods crushes Wall Street estimates as online sales surge 194%, shares soar

An employee of Dick’s Sporting Goods in Destiny USA mall delivers products to a shopper, as customers pick up goods from retailers offering curbside pick up as the coronavirus disease (COVID-19) restrictions ease in Syracuse, New York, U.S., May 15, 2020.

Zachary Krahmer | Reuters

Dick’s Sporting Goods reported eye-popping quarterly earnings and sales growth Wednesday, as consumers flocked to its website for hiking gear, kayaks, weights and workout clothes to stay busy during the coronavirus crisis

Its shares jumped more than 16% in pre-market trading. 

The retailer’s digital sales surged 194%, including the orders customers made online to pick up at stores when they were shuttered. And profits increased a triple-digit percentage from a year ago, thanks in part to the retailer not having to use as many promotions to move merchandise that was hot in demand. 

“During this pandemic, the importance of health and fitness has accelerated and participation in socially distant, outdoor activities has increased,” Chief Executive Ed Stack said in a statement. “There has also been a greater shift toward athletic and active lifestyle product with people spending more time working and exercising at home.” 

“The majority of our assortment sits squarely at the center of these trends … we are in a great lane right now,” he said. 

Here’s how Dick’s Sporting Goods did during its fiscal second quarter ended Aug. 1, compared with what analysts were expecting, based on Refinitiv data: 

  • Earnings per share: $3.21, adjusted, vs. $1.30 expected 
  • Revenue: $2.71 billion vs. $2.46 billion expected 

Net income for the quarter ended Aug. 1 grew roughly 148% to $276.8 million, or $3.12 per share, compared with $112.5 million, or $1.26 a share, a year ago. 

Excluding one-time charges, Dick’s Sporting Goods earned $3.21 per share, more than double the $1.30 that analysts were projecting. 

Net sales increased 20.1% to $2.71 billion from $2.26 billion a year ago, beating expectations for $2.46 billion. 

Same-store sales, which track sales at stores open for at least 12 months, were up 20.7%. That was better than the 9.9% expected by analysts polled by FactSet, and up drastically from growth of 3.2% in the same period last year. 

Dick’s Sporting Goods said its online sales, which skyrocketed nearly 200%, represented roughly 30% of total revenue during the quarter, compared with about 12% a year ago. 

President Lauren Hobart said the growth was supported by the fact that the average ticket and transactions were up, while sales in apparel and footwear — two of its strongest categories — grew substantially. 

The big-box retailer joins Walmart, Target and Best Buy in reporting remarkable results in recent days, while many mall-based companies are limping through the Covid-19 crisis. The strongest retailers appear to only be getting stronger, with the gap widening between the so-called haves and have-nots. 

Dick’s Sporting Goods said it is not offering an outlook for the rest of this year at the time due to the pandemic. It did say it has seen some “softness” across key back-to-school categories so far in the current quarter, as many parents are still unsure what this school year is going to look like during a global pandemic. 

So far, during the first three weeks of its fiscal third quarter, Dick’s Sporting Goods said same-store sales are trending up 11%. 

The retailer ended the second quarter with $1.1 billion in cash and cash equivalents on its balance sheet. 

Its inventories dropped 12.2% compared with a year ago. 

Dick’s Sporting Goods shares have fallen roughly 6% this year. The stock is up about 44% over the past 12 months, and has a market value of $4.2 billion. 

Find the full earnings press release here. 

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