Dick’s Sporting Goods' Q2 earnings fall short of guidance

Dick’s Sporting Goods reported consolidated net income for the second quarter ended July 29, 2017 of 112.4 million dollars or 1.03 dollars per diluted share, compared to the company's expectations provided on May 16, 2017 of 0.98 to 1.03 dollars per diluted share. Consolidated net income for the quarter was 91.4 million dollars or 0.82 dollar per diluted share. Net sales increased 9.6 percent to around 2.2 billion dollars and consolidated same store sales increased 0.1 percent, compared to the earlier guidance of an approximate 2 to 3 percent increase. Second quarter 2016 consolidated same store sales increased 2.8 percent.

"In this very competitive and dynamic marketplace, we were able to deliver a significant increase in our bottom line from last year. By design, we will be more promotional and increase our marketing efforts for the remainder of the year, as we will aggressively protect our market share. We have updated our outlook to reflect these investments. We continue to believe retail disruption creates opportunities for us as we look long-term," said Edward W. Stack, the company’s Chairman and CEO in a media release.

Second quarter non-GAAP net income reached 104.8 mn dollars

On a non-GAAP basis, the company reported consolidated net income for the second quarter of 104.8 million dollars or 0.96 dollar per diluted share, compared to the company's expectations provided on May 16, 2017 of 1.02 dollars to 1.07 dollars per diluted share.

Ecommerce sales increased approximately 19 percent and its penetration for the quarter was 9.2 percent of total net sales, compared to 8.5percent during the second quarter of 2016. In the second quarter, the Company opened 13 new Dick’s Sporting Goods stores and closed one specialty concept store. As of July 29, 2017, the company operated 704 Dick’s Sporting Goods stores in 47 states, 98 Golf Galaxy stores in 32 states and 29 Field & Stream stores in 14 states.

First half consolidated net income reaches 170.6 mn dollars

The company reported consolidated net income for the 26 weeks ended July 29, 2017 of 170.6 million dollars or 1.55 dollars per diluted share. For the 26 weeks ended July 30, 2016, the company reported consolidated net income of 148.3 million dollars or 1.32 dollars per diluted share. On a non-GAAP basis, the company reported consolidated net income of 165.1 million dollars or 1.50 dollars per diluted share.

Net sales for the period increased 9.8 percent from last year's period to approximately 4 billion dollars, reflecting the growth of the company’s store network and a 1.1percent increase in consolidated same store sales.

On August 10, 2017, the company's board of directors authorized and declared a quarterly dividend in the amount of 0.17 dollar per share on the company's common stock and class B common stock.

The company reveals FY17 outlook

Based on an estimated 109 to 110 million diluted shares outstanding, the company currently anticipates reporting earnings per diluted share in the range of 2.85 dollars to 3.05 dollars, which includes approximately 0.05 dollar per diluted share for the 53rd week. The company reported earnings per diluted share of 2.56 dollars for the 52 weeks ended January 28, 2017. The company currently anticipates reporting non-GAAP earnings per diluted share in the range of 2.80 dollars to 3 dollars. The company reported non-GAAP earnings per diluted share of 3.12 dollars for the 52 weeks ended January 28, 2017.

Consolidated same store sales are currently expected to be in the range of approximately flat to a low single-digit decline on a 52 week to 52 week comparative basis, compared to an increase of 3.5 percent in 2016. The company expects to open approximately 43 new Dick’s Sporting Goods stores and relocate approximately seven Dick’s Sporting Goods stores in 2017. The company also expects to open approximately eight new Golf Galaxy stores, relocate one Golf Galaxy store and open eight new Field & Stream stores adjacent to Dick’s Sporting Goods stores. These openings include former TSA and Golfsmith stores that the company converted to Dick’s Sporting Goods and Golf Galaxy stores, respectively.

Based on an estimated 108 million diluted shares outstanding, the company currently anticipates reporting earnings per diluted share in the range of 0.22 dollar to 0.30 dollar in the third quarter of 2017. This is compared to earnings per diluted share of 0.44 dollar in the third quarter of 2016. On a non-GAAP basis, the company reported earnings per diluted share of 0.48 dollar for the 13 weeks ended October 29, 2016.

Consolidated same store sales are currently expected to decline in the low single-digits in the third quarter of 2017, as compared to a 5.2 percent increase in the third quarter of 2016. The company expects to open 15 new Dick’s Sporting Goods stores and relocate four Dick’s Sporting Goods stores in the third quarter of 2017. The company also expects to relocate one Golf Galaxy store and open six new Field & Stream stores adjacent to Dick’s Sporting Goods stores. These openings include one former TSA store that the company plans to convert to a Dick’s Sporting Goods store.

Picture:Facebook/Dick's Sporting Goods