Dick's Sporting Goods misses Q4 earnings estimate

Dick’s Sporting Goods has said that the consolidated net income for the fourth quarter ended January 30, 2016 was 129 million dollars, or 1.13 dollars per diluted share, compared to the company's expectations of 1.10 dollars to 1.25 dollars per diluted share. For the 52 weeks ended January 30, 2016,net income was 330.4 million dollars or 2.83 dollars per diluted share compared to 344.2 million dollars or 2.84 dollars per diluted share, reported last fiscal.

"Given the challenging conditions we faced with the unseasonably warm weather, we operated quite well in the fourth quarter, generating earnings within our guided range and driving results in important growth categories," said Edward W. Stack, Chairman and Chief Executive Officer,adding, "In 2015, we grew our omni-channel platform by maintaining strong new store productivity and driving our ecommerce business."

Summary of the fourth quarter results

Net sales for the fourth quarter increased 3.7 percent to approximately 2.2 billion dollars and consolidated same store sales decreased 2.5 percent compared to the company's guidance of negative 2 percent to positive 1 percent. Same store sales for Dick’s Sporting Goods decreased 2.5 percent, while Golf Galaxy decreased 5.8 percent. Fourth quarter 2014 consolidated same store sales had increased 3.4 percent.

Ecommerce penetration for the fourth quarter was 15.7 percent of total net sales, compared to 14.4 percent during the fourth quarter of 2014. Ecommerce penetration for the 52 weeks ended January 30, 2016 was 10.3 percent of total net sales, compared to 9.2 percent, last year. The company opened one new Dick’s Sporting Goods store, relocated one and closed two Dick’s Sporting Goods stores. The company also closed two Golf Galaxy stores. As of January 30, 2016, it operated 644 Dick’s Sporting Goods stores in 47 states, 73 Golf Galaxy stores in 29 states, and 19 Field & Stream stores in nine states.

Full year result highlights and outlook

The company reported consolidated non-GAAP net income for the 52 weeks ended January 30, 2016 of 335.1 million dollars or 2.87 dollars per diluted share. Net sales for the period increased 6.7 percent from last year's period to 7.3 billion dollars, reflecting the opening of new stores partially offset by a consolidated same store sales decrease of 0.2 percent.

Based on an estimated 111 to 112 million diluted shares outstanding, the company currently anticipates reporting consolidated earnings per diluted share of approximately 2.85 dollars to 3 dollars. Consolidated same store sales are currently expected to be approximately flat to an increase of 2 percent, compared to a decrease of 0.2 percent in 2015.

The company expects to open approximately 36 new Dick’s Sporting Goods stores and relocate approximately nine stores in 2016. The company also expects to open approximately nine new Field & Stream stores and two new Golf Galaxy stores in 2016, largely adjacent to new or relocated Dick’s Sporting Goods stores.

Based on an estimated 113 million diluted shares outstanding, the company currently anticipates reporting consolidated earnings per diluted share of approximately 0.48 dollar to 0.50 dollar in the first quarter of 2016, compared to consolidated earnings per diluted share of 0.53 dollar in the first quarter of 2015. Consolidated same store sales are currently expected to be approximately flat to an increase of 1 percent, compared to a 1 percent increase in the first quarter of 2015.

The company expects to open approximately three new Dick’s Sporting Goods stores, relocate three stores, and open two new Field & Stream stores in the first quarter of 2016.

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