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Dick’s Sporting Goods' Q2 earnings beat expectations

By Prachi Singh

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Report

Dick’s Sporting Goods has reported consolidated net income for the second quarter ended July 30, 2016 of 91.4 million dollars or 0.82 dollar per diluted share, compared to the company's expectations provided on May 19, 2016 of 0.62 dollar to 0.72 dollar per diluted share. Consolidated net income stood at 90.8 million dollars, or 0.77 dollar per diluted share. Net sales increased 7.9 percent to about two billion dollars.

"We are pleased with our second quarter results, particularly in light of the liquidation activity in the market," said Edward W. Stack, Chairman and CEO. "Looking ahead, we are focused on capturing the displaced market share and remain confident in our ability to strengthen our leadership position."

Important highlights of the second quarter

Consolidated same store sales increased 2.8 percent, compared to the company's guidance of negative 4 to negative 1 percent. Same store sales for Dick’s Sporting Goods increased 3 percent, while Golf Galaxy decreased 4.3 percent.

Ecommerce penetration for the quarter was 8.5 percent of total net sales, compared to 7.3 percent during the second quarter of 2015. The company opened five new Dick’s Sporting Goods stores and relocated two during the quarter under review. Additionally, the company closed three Dick’s Sporting Goods stores and one Golf Galaxy store. As of July 30, 2016, the company operated 649 Dick’s Sporting Goods stores in 47 states, 72 Golf Galaxy stores in 29 states, and 21 Field & Stream stores in ten states.

For the 26 weeks ended July 30, 2016 consolidated net income was 148.3 million dollars or 1.32 dollars per diluted share. Net sales for the period increased 7.1 percent from last year's period to approximately 3.6 billion dollars, reflecting the growth of our store network and a 1.7 percent increase in consolidated same store sales.

Expects to report same-store sales growth in FY16

Based on an estimated 111 to 112 million diluted shares outstanding, the company currently anticipates reporting consolidated earnings per diluted share in the range of 2.90 dollars to 3.05 dollars , excluding costs the Company expects to incur to convert former The Sports Authority stores to Dick’s Sporting Goods stores. Consolidated same store sales are currently expected to increase approximately 2 to 3 percent, compared to a 0.2 percent decrease in fiscal 2015.

The company expects to open approximately 36 new Dick’s Sporting Goods stores and relocate approximately nine Dick’s Sporting Goods 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 111 million diluted shares outstanding, the company currently anticipates reporting consolidated earnings per diluted share in the range of 0.39 dollar to 0.42 dollar in the third quarter of 2016. Consolidated same store sales are currently expected to increase approximately 2 to 3 percent in the third quarter of 2016, as compared to a 0.4 percent increase in the third quarter of 2015.

The company expects to open approximately 25 new Dick’s Sporting Goods stores and relocate four Dick’s Sporting Goods stores in the third quarter of 2016. The company also expects to open approximately seven new Field & Stream stores and two new Golf Galaxy stores.

Picture:Dick's Sporting Goods

Dick's Sporting Goods